Greenwich fund manager Walter Noel Jr. and his wife Monica had it all: Luxurious houses on Connecticut’s wealthy coast, Palm Beach and the Hamptons, a Park Avenue pied-a-terre and, most of all, a hilltop retreat on an exclusive island in the Caribbean named after a goddess. They hobnobbed with Mick Jagger and Tommy Hilfiger, who sounded a bit jealous of their view.
The couple’s five tall, attractive daughters mostly married foreign men in high social circles, adding to an extraordinary network of international connections that along with remarkably consistent returns helped Noel expand his New York-based money management firm with billions of investments from the elite around the world.
“They almost were like a fashion magazine version of a very wealthy, prosperous attractive family,” said David Patrick Columbia, who runs New York Social Diary.com, a site that observes the lives of the rich. “They’re very well liked, very popular.”
That world is now in jeopardy as investors line up to sue over the $7 billion in client funds that Noel’s Fairfield Greenwich Group invested with Bernard Madoff, the alleged architect of what investigators say may be the largest Ponzi scheme in history. Madoff is accused of duping investors out of as much as $50 billion by paying returns to certain investors out of the principal received from others.
The lawsuits filed against Noel and his company accuse them of ignoring obvious red flags with Madoff and unjustly enriching themselves of at least $1 billion, and say Fairfield Greenwich Group failed to provide even minimal scrutiny of Madoff. Investors say the firm misled shareholders about monitoring the investments, all while collecting lucrative investing fees.
“I don’t think they were active participants in the fraud,” said Robert Finkel, attorney for a retirement trust fund that lost $200,000. “They’re probably ‘hear no evil, see no evil.’ “
Noel had a business relationship with Madoff for more than 20 years, according to one of the lawsuits. Fairfield Greenwich Group earned hundreds of millions of dollars and possibly more than $1 billion in fees for raising large sums of money from investors that was invested with Madoff, according to the lawsuit.
Fairfield Greenwich says it performed extensive due diligence and, like many others, was victimized by a sophisticated criminal scheme. The company says Noel and other partners invested about $60 million of their own money with Madoff.
But over the years, there were warning signs. Experts who looked at Madoff concluded his claimed investment strategy was statistically impossible, the lawsuits claim.
Michael Markov, chief executive of Markov Processes International, said his company analyzed one of Fairfield Greenwich’s funds that invested with Madoff in 2006 and concluded the returns were most likely not real. Such returns would have required perfect foresight and more option contracts than existed in the market, he said.
Noel’s firm has not been charged in the Madoff case. FBI agents have not contacted Fairfield Greenwich, according to a person close to the firm who spoke on condition of anonymity because he was not authorized to speak about the matter. The person said regulators with the Securities and Exchange Commission did visit the company’s headquarters in New York recently, but said they were not from the enforcement division.
Noel, a 78-year-old Tennessee-born financier, declined an interview request through his company, and did not return messages left at his home. Friends described him as well liked in the wealthy social circles he frequented.
Family friend George Ball compared Noel to Jimmy Stewart’s character in the movie “It’s a Wonderful Life.”
“He’s a very decent person, very caring person, perhaps naive in some ways, but far from a fool,” Ball said. “I think he is on balance a victim.” (AP)
