Eideard

Daylife/Reuters Pictures used by permission

Bernard Madoff is said to have told fellow inmates that he squirreled away a secret $9 billion which prosecutors do not know about from his $65 billion ponzi scheme fraud.

Madoff, who was jailed last year for 150 years after admitting to orchestrating the historic fraud, is reported to have channelled the funds to three individuals – whose identities remain unknown – shortly before he confessed to his crimes in December 2008. “I think it was personal friends,” one inmate is reported to have said.

The claims, made in the New York Post, are based on conversations with an inmate who spent time in prison with Madoff. It is the first time since Madoff’s crimes came to light some 19 months ago that there has been any formal suggestion – in spite of numerous rumours – that the former fund manager attempted to hide significant amounts of money from prosecutors and the police.

If true, it could prove to be a significant development for Irving Picard, the court-appointed trustee charged with uncovering Madoff’s secret assets, who is now likely to want to interview Madoff to find out where the money is.

The fellow prisoner also claimed that Madoff told him that the only other person to know of the identities of the three is Frank DiPascali, his former right-hand man, though it is not clear whether he knew money had been passed to them.

Mr DiPascali has pleaded guilty to 10 separate counts relating to the Madoff fraud and is currently working with federal prosecutors from jail to help them widen the case.

Or someone has been watching too much television. Think this might be a promo for the next season of Damages, eh?