Bogus site targets Madoff victims, US agency says
+ Site purports to have found $1.3 bln in Malaysia hideout
+ SIPC warns investors against providing information
NEW YORK (Reuters) - First, investors were stung by Bernard Madoff's hugely bogus returns, now a U.S. agency says another financial predator claims to have found a hidden pot of Madoff money in Malaysia to help pay back customers.
The Securities Investor Protection Corp (SIPC), the agency that keeps a reserve fund for investors of insolvent brokerages, warned Tuesday that its web site was being mimicked by a phony organization targeting Madoff investors.
The copycat site, http://www.I-SIPC.com -- I for International -- has a link to a picture of a large stack of U.S. currency under the headline, "ISIPC & Interpol Discovers $1.3 billion hidding by Madoff in Malaysia." ("Hidden" is misspelled on the site).
In a statement, SIPC warned investors not to provide personal or financial information on the site, which has a Geneva mailing address. SIPC has alerted international market regulators and it is taking steps to shut down the site.
One passage, with spelling or grammatical errors, claims to have interviewed Madoff, who is serving a 150-year prison sentence after pleading guilty a year ago to orchestrating Wall Street's biggest investment fraud of as much as $65 billion.
"We have being tracking this stolen fund for couple of months but after concrete information got to us that Madoff might have hiding some funds in various discrete locations our teams interrogated some of Madoff past workers and with the interview we had with Madoff last month we were able to conclude our investigation," the site said.
Over the years of the decades-long epic Madoff swindle, some investors received consistently high returns of 12 percent to 18 percent, but the Madoff firm made few actual trades in securities. He ran a Ponzi scheme in which early investors are paid with the money of new clients.
SIPC President Stephen Harbeck said there were some indications the bogus site may have origins in Nigeria. He said the site has some aspects of "recovery room" frauds prevalent out of Nigeria where investors are enticed to make an initial modest deposit with the promise of even greater returns.
"We tried to act as rapidly as possible," Washington-based Harbeck said by telephone. "This came to our attention yesterday afternoon and this may not be the last of these kinds of fraudulent activities."
A court-appointed trustee is working under the auspices of SIPC to recover as much money as possible from the Madoff fraud. That effort has identified about $1.5 billion so far, according to court records. (Reporting by Grant McCool; Editing by Tim Dobbyn)
