September Trip To Busey Bank A Smoking Gun In Ralph Cioffi Case?
Ralph Cioffi and Matthew Tannin are the leading players in perhaps one of the most eagerly awaited trials in Wall Street history. Cioffi and Tannin are the former managers of two failed Bear Stearns hedge funds
- the High-Grade Structured Credit Fund and the Enhanced Leveraged Fund - that ignited the market meltdown in 2007. Now it appears there’s a new twist to their trial, with Cioffi accused of trying to get his hands on loan documents in Florida ahead of the government’s subpoena.
Prosecutors have long alleged that Cioffi, with Tannin’s help, illegally used his investment in his own hedge funds as collateral for a loan from Busey Bank in Ft. Myers, Fla., which was to help end a foreclosure threat against a Florida condominium development owned by Cioffi and his brother.
According to an article appearing Oct. 2 in Fortune magazine, Cioffi made a fast trip to Florida on Sept. 18 for the purpose of allegedly getting his hands on the original copies of the loan documents from Busey Bank officials.
Prior to the trip, the article says Cioffi called a Busey Bank employee on Sept. 8 to locate the loan records. On Sept. 16, another call was placed by Cioffi to the employee. During their conversation, Cioffi reportedly told the individual that he would be travelling to Florida and wanted to accompany her to the “bank’s storage facility” so that he could personally look for the documents in question. On Sept. 17, the government informed the federal court about the subpoena it had issued to Busey Bank regarding the Cioffi loan documents.
On Sept. 18, Cioffi did in fact fly to Florida to try and retrieve the documents. In an alleged voicemail message left for a bank employee, Cioffi said: “Jen, Hi, Ralph Cioffi calling, it’s Friday morning, it’s 8:30 a.m., I’m actually on my way to Ft. Myers from Newark Airport, New Jersey. I land about 12:15. I’ll call you when I land. I was hoping to in the meantime you might have been able to find the file and if you had, I would love to come by and get a fax copy of the document or the document itself. In any event, my number is [number redacted], if in fact you wanted to call me and leave me a message one way or another. If I don’t hear from you I’ll check in when I land. Thanks.”
When a bank employee informed Cioffi his original loan documents had not been located, Cioffi asked that the originals be sent by “Federal Express to his residence in Tenafly, New Jersey.”
The U.S. Attorney’s Office in Brooklyn has since written a letter to U.S. District Judge Frederic Block, stating that, “Cioffi’s attempt to take possession of the original documents before Busey Bank could turn them over to the government, pursuant to a valid federal subpoena, is troubling and could have impeded the government’s ability to obtain the original loan documents. Such conduct, depending on the defendant’s motive, may be punishable as a felony under federal law.”
Meanwhile, prosecutors are calling Cioffi’s latest actions consistent with a cover-up. As for Cioffi, he contends the Florida trip was key to exonerating himself.
A court will decide on who’s right or wrong on Oct. 13, when the much-awaited trial of Ralph Cioffi and Matthew Tannin officially gets underway.
The case is U.S. v. Cioffi, 08-cr-00415, U.S. District Court, Eastern District of New York (Brooklyn).
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