The renaissance man J. Ezra Merkin surely will know that "cahoots" derives from the French cahute, meaning a cabin or hut and implying collaboration or collusion.
It boggles our imagination to consider it at all possible that J. Ezra was not aware that Bernie Madoff was engaged in illicit activities.
And then it re-boggles our sensibilities that he took $688 million - that he did not know enough to quit five or ten years ago.
We learned at Morgan Stanley that it's the minhag (custom) on Wall Street to make your money young and move on out by your early 40's at the latest. Ezra must have missed that day in class at business school.
And just one more thing. The latest NJ Orthodox rabbi scandal cannot help J. Ezra. Sure, one scandal officially has nothing to do with another. But when he stands there in court, looking like an Orthodox rabbi, you can be sure it won't take much imagination for the judge and jury to draw their own associations, merited or unmerited, conscious or unconscious.
As they also say, though not derived from the French, he cooked his goose.
Here's the latest scoop from Crain's, summed up, "J. Ezra Merkin made $688 million over 20 years for funneling $4.4 billion of investor funds to jailed swindler Bernard Madoff and others":
Madoff-tainted Merkin pocketed $35M a year
By Aaron Elstein
J. Ezra Merkin, one of Bernie Madoff’s most important sources of cash, pocketed an average of $35 million in fees every year for funneling money to the Ponzi schemer and other investment firms.
The fallen financier, a scion of one of the city’s most prominent families, raised a total of $4.4 billion over his nearly 20-year career as a money manager. About half of that went to Mr. Madoff, as investors flocked to the man who seemed to possess a golden touch. In turn, Mr. Merkin received $688 million in management and incentive fees, according to a court document filed late Monday by the New York attorney general’s office, which in April sued Mr. Merkin for defrauding investors of $2.4 billion.
The figures provide the most detailed look yet into Mr. Merkin’s fortune. They illustrate how he could afford to assemble one of the world’s finest collections of Mark Rothko paintings and acquire a two-floor apartment at 740 Park Ave. In June, Mr. Merkin agreed to sell the core of his art collection for $191 million in order to partially repay cheated investors.
Mr. Merkin didn’t actually manage any money himself in exchange for the hefty fees he charged, according to the attorney general’s office. His annual fee was usually 1% of the assets and 20% of the investment gains. In 2003, he increased the management fee to 1.5% for one of his funds, from which he funneled money almost exclusively to Mr. Madoff.
Mr. Merkin entered the money management business in 1988 after a stint as a corporate lawyer and opened two investment funds: Gabriel Capital and Ariel Fund (which is no relation to the Chicago-based mutual fund firm). He placed about 30% of the funds’ $2.7 billion in assets with Mr. Madoff and the rest with private equity powerhouse Cerberus Capital Management and Cohanzick Capital, a small Manhattan investment firm that specializes in junk bonds and distressed securities.
In 1995, Mr. Merkin opened a third fund, Ascot Partners, which attracted $1.7 billion in client assets, nearly all of which were invested with Mr. Madoff.
In an April filing with the court, the attorney general’s office said Mr. Merkin had made $470 million in fees over approximately 15 years.
Mr. Merkin’s clients were some of the city’s most prominent nonprofits and families, including Yeshiva University, New York University and Daily News owner Mort Zuckerman. According to the attorney general’s office, more than $3.2 million of Mr. Merkin’s annual income came just from management fees charged to nonprofits.
A spokesman for Mr. Merkin didn’t immediately respond to a request for comment. Mr. Merkin has asked a New York state Supreme Court judge to dismiss the attorney general’s suit. A hearing is scheduled for Aug. 12.