Walter M. Noel firm, including four sons-in-law as partners, now has the distinction of being the biggest known loser in the Madoff scandal

Walter M. Noel firm, including four sons-in-law as partners, now has the distinction of being the biggest known loser in the Madoff scandal, to the tune of $7.5 billion.
For Fairfield Greenwich and a handful of other big feeder funds that were essentially pouring billions of dollars each into Bernard L. Madoff Investment Securities, a lucrative business evaporated last week when federal prosecutors said Mr. Madoff had been operating what may have been the biggest Ponzi scheme in history.
Mr. Madoff puts his own fraud at $50 billion and discussed details of it with federal prosecutors in New York on Tuesday, according to people briefed on the meeting. The Fairfield Greenwich Group charged clients an annual fee of 1 percent of assets invested for providing access to exclusive hedge funds and performing due diligence on them, in addition to a fee of 20 percent on investment gains each year, according to people close to the fund’s operations. At that rate, an investment of $7 billion would have paid Mr. Noel’s company $70 million annually, and then $140 million more in a year in which Mr. Madoff reported a 10 percent gain (he steadily reported returns of 10 to 12 percent).

Other middlemen for Mr. Madoff’s vehicles — like J. Ezra Merkin and his Ascot Partners fund and Gerald Breslauer, a financial adviser in Los Angeles who invested with Mr. Madoff on behalf of Steven Spielberg and Jeffrey Katzenberg — also collected millions in fees, though they may have had different arrangements.

Mr. Merkin and his Ascot fund took 1.5 percent of assets. On Friday, New York Law School filed a lawsuit in Federal Court in Manhattan against Mr. Merkin and Ascot. The suit claims he abdicated his fiduciary responsibilities and issued false and misleading documents. Mr. Merkin’s lawyer said he intended to defend the lawsuit vigorously.

The Tremont Group, a unit of Oppenheimer that is in turn owned by MassMutual, had $3.3 billion with Mr. Madoff, while Optimal Investment Services of Geneva, a unit of Santander of Spain, puts its exposure at $3.1 billion. Other big investors include Kingate Management at $3.5 billion, Union Bancaire Prive of Geneva at $1 billion and Bank Medici of Vienna at $2.1 billion, demonstrating the worldwide reach.

Mr. Noel’s largest fund, the $7.3 billion Fairfield Sentry fund, invested exclusively with Mr. Madoff. Mr. Noel has not disclosed how much of that was his own or belonged to family members and how much was his investors’. One of his daughters said, through a spokeswoman at Rubenstein Public Relations, that “a very substantial part of each family member’s personal assets was invested with Bernard Madoff alongside those of our investors.”Fairfield Greenwich is based on East 52nd Street, though Mr. Noel worked frequently from Fairfield with his partners, Jeffrey Tucker, formerly of the Securities and Exchange Commission, and Andres Piedrahita. The 78-year-old Mr. Noel had a master’s degree in economics and a law degree — both from Harvard — and had worked for decades in banking before he founded Fairfield Greenwich, which established itself primarily as a marketing entity.“As it grew beyond, you know, an informal, personal concern where Walter and a couple of people were investing money for his friends, they developed as a marketing force to put Madoff and investors together,” said George L. Ball, a former executive at E. F. Hutton and Prudential-Bache Securities who became friends with the Noels decades ago when both lived in Greenwich.Mr. Noel met Mr. Madoff in the early 1980s and the businesses of both men grew symbiotically. Mr. Noel was as good a salesman as Mr. Madoff could have wished for. Mr. Noel is routinely described as affable, assured, graceful and nonaggressive. “He’s a terribly good person, almost in the sense of Jimmy Stewart in ‘It’s a Wonderful Life’ combined with an overtone of Gregory Peck in ‘To Kill a Mockingbird,’ ” Mr. Ball said.Mr. Noel grew up in Nashville and met his future wife just after law school, when mutual friends set them up on a blind date. They built a modestly prosperous life in Greenwich, and were perhaps best known among associates for their Christmas cards— “the people with five stunning girls,” in the words of a family friend.