U.K.’s Prince Charles Targeted by Madoff Marketer, Witness Says

Britain’s Prince Charles, among other royalty and wealthy Europeans, were targeted through Bernard Madoff’s use of high-profile recruiters, said whistleblower Harry Markopolos in documents given U.S. lawmakers.

Prince Michael of Yugoslavia was an executive of a so-called Madoff feeder fund, Access International Advisors Ltd., when he met Prince Charles and his sons at a polo field during a marketing tour in 2002, Markopolos said. Prince Charles put no money with Madoff, said a person familiar with the matter. Liliane Bettencourt, the world’s wealthiest woman, did lose money after she entrusted part of her $22.9 billion fortune to Access, two people familiar with the matter said.

"It is my belief that Access likely had several royal families as clients invested in Madoff," Markopolos said. "He was truly masterful in using his feeder funds to draw in people close in make-up to the owners of the feeder funds. In this way he was able to expand his affinity victims to those beyond that of the Jewish community."

Markopolos made the statement in documents prepared for the U.S. Securities and Exchange Commission as part of a nine-year effort to persuade the regulator to investigate Madoff. The documents were released as part of his testimony to a congressional panel on Feb. 4. Markopolos, a former chief investment officer for Rampart Investment Management in Boston, tried to replicate Madoff’s declared investment strategy and said he found it didn’t work.

Fabrice Goguel, a lawyer for the L’Oreal SA heiress Bettencourt, couldn’t be reached by phone for comment. Prince Michael, who is 99th in line to the British throne, according to www.britroyals.com, couldn’t be reached by e-mail.

List of Customers

Many Madoff victims, including Bettencourt, don’t appear on a list of customers filed Feb. 4 in U.S. Bankruptcy Court in Manhattan, though the funds they invested in, such as Access, are there.

Access was majority owned by noblemen whose ancestors served as Napoleon’s military officers, said Markopolos, who accompanied the fund’s officials on the 2002 marketing trip, he said. Access Chief Executive Officer Thierry Magon de La Villehuchet was found dead in his New York office Dec. 23 after potentially losing all of the money he invested with Madoff.

Access partner Philippe Junot is the former husband of Princess Caroline of Monaco and Prince Michael was an investor relations executive, according to the firm’s marketing documents.

Access in 2002 invested about 45 percent of its $1.2 billion under management with Madoff, Markopolos said. The hedge fund by last year managed $3 billion and raised the proportion of funds with Madoff to about 75 percent because Madoff seemed to be doing well, Villehuchet’s brother Bertrand said in an interview with Bloomberg last month.

"He did it in the belief that it would help his investors, and the proof is that he put all of his wealth and 20 percent of mine in as well," he said.

(Bloomberg - February 6, 2009)