Now Main Street Knows how Bear’s Jeff Verschleiser made Millions off Cheating Others

One of the central bad actors in my reporting on the alleged fraud machine Bear Stearns mortgage department was running made headlines this weekend for spending an absurd amount of greenbacks to promote his daughter’s coming of age. Jeff Verschleiser, age 43, and his wife Amy, age 41, went and bought out a popular Aspen hotel during a special local weekend celebration called Winterskol and now have a lot of people offended. Media reports estimated the Jewish family is spending between $500k to $1 million for the four-day weekend + Bat Mitzvah party. Now spending tons of money to throw a religious celebration for your teen isn’t anything new for the New York Jewish set but Matt Taibbi of Rolling Stone picked up on the notion Jeffery didn’t exactly make the dollars he’s spending this weekend honestly.

The daughter’s name is Madison Rose Verschleiser and when she’s not buzzing around the Aspen slopes entering ski races or hanging in her parents huge 2nd home at Aspen’s Stillwater Ranch area, she lives in her parents mega million Central Park-view apartment on 5th Avenue. Aspen Daily News reporters told me they saw Madison’s parents had three big LCD’s placed in the hotel lobby with their daughters face in a circle jerk of photos running repeatedly on the screens – you know because its ‘All about Madison this weekend’. I found a website, madisonaspen2012.com, created in honor of Madison’s big weekend but it looks like the family took it down after news broke on their spending habits. (Of course a google cache of the website still works.)

Readers of mine know the story about Verschleiser and his Bear Stearns trader buddy Mike Nierenberg allegedly stealing billions from their own clients during the housing boom by packaging and selling totally dysfunctional mortgage securities that helped bring down the bank. But now with Taibbi revisiting about a years’ worth of my reporting on the Bear traders’ apparent securities fraud Verschleiser is officially labeled one of Wall Street’s biggest pricks.

Taibbi Wrote:

At first, I couldn’t remember how I knew that name. But then I looked it up and saw an explosive Atlantic magazine story, published last year, called, “E-mails Suggest Bear Stearns Cheated Clients Out Of Millions.” And then I remembered that piece, and it hit me: Jeffrey Verschleiser is one of the biggest assholes in the entire world!

In one of the latest civil fraud complaints against Bear Stearns, and their owner JP Morgan, about 30 whistleblowers came forward to explain Jeff and his fellow traders were known as ‘Bear Don’t Care’ for telling third-party due diligence firms to just ignore all the mortgage loans in the billions of securities they were selling when they put their stamp of approval on the deal. A stamp that got plenty of pension funds to buy their ‘sack of shits’. It’s this ‘Don’t Care’ attitude that seems to have upset a lot of people this weekend as the pitchforks and frustrated anger rang loud and clear in the comment section of every story written on Jeff’s daughter party (there are about 9 of them). The New York Post even got one Aspen weekender to call it “a disgusting display of ill-gotten gains.”

Because of the need for the Verschleisers to have a private event in a public place, the locals can’t use their favorite watering hole at Hotel Jerome, called the J Bar, and spend their hard-earned dollars watching the Broncos make a run at the NFL playoffs because Jeffrey is all about exclusivity. It’s unclear if the Verschleisers plan to compensate the bar staff for all the lost tips this weekend – locals tell me some bartenders can make up to $1k a night on a big weekend like this. The editor of the Aspen Daily News, Carolyn Sackariason, broke more news last night reporting Verschleiser spent about $7,000 to kick out anyone wanting to use the city-owned Aspen Family Rec Center tonight so his daughter Madison and her friends can privately run around in it.

As the world is soaking in what a douchebag Jeff Verschleiser is I’m wondering how his wife feels spending the millions he made off the backs of pension funds and the rest of Bear Stearns employees who lost sooo much money when the firm failed and their stock was sold for only few bucks. Taibbi writes that Jeff’s actions helped bring down the firm but for quite a few years he was actually the gold money maker for the bank with his hand in every part of the fee earning process a mortgage security could go through (the Ambac suit points out he just didn’t do it ethically or legally). It wasn’t until mid 2007 when he pigged out buying failed subprime lender Encore, that the bank got stuck with millions of very sick wholesale mortgage loans. Loans that sucked the life out the banks regulatory capital and eventually were a part of what led to a liquidity problem. Jeff’s wife Amy, a former private school teacher and Dalton 88’ grad, happens to be on a bunch of Jewish charity boards (such as the NYC United Jewish Association) and I wonder if the charity work (aka party planning) is to clear her conscious. It’s not like she can’t read the actions of her husband that are laid out in multiple civil fraud suits citing his own emails. Given she was also a Madoff investor who lost a few bucks, you’d hope there is some twinge of pain in seeing the rest of world want to throw up over their family’s obnoxious display of wealth this weekend.

Amy appears to have grown up in an influential upper east side jewish family. Her Aunt, Elaine Turner Cooper, was a huge patron of the Whitney Museum and her 1st cousin Steven Mnuchin is now the ex-Goldman guy who runs the carcass of failed IndyMac. (It might make sense that Mnuchin helped Jeffrey get the Goldman job when JP Morgan threw him out after the Bear take over.) During her husband’s boom earning years, 2006, online real estate records show the family moved out of a upper east side duplex they bought for $10 million on Park Ave and upgraded to a full floor Central Park apartment on 5th Avenue that has only 15 apartments in the building selling for at least $16 million (They live on the third floor of 944 5th Ave, New York, NY). Property records show they also spent $16.5 million for a new custom-built 5-bedroom Aspen home at 61 Stillwater Lane in the fall of 2006. This is the same time period billions of Bear mortgage securities were created by Jeff – securities that the Netherland’s largest state pension fund just sued Mr. Verschleiser individually for his role in fraudulent inducement and multiple violations of securities laws. The suit was filed on December 7th in New York State court.

Taibbi added an update to his story with a rant on why Verschleiser hasn’t been indicted yet for allegedly stealing billions from his own clients. But the colorful Rolling Stone writer must have failed to read my story this summer about NY Assemblyman Morelle pushing his friend the NY Attorney General to start a criminal investigation into the Bear mortgage team. The AG has asked civil attorneys suing Bear/JPM to share evidence with him and I’ve spoken with people his team has interviewed- they all say he’s serious about using the Martin Act against these bad boys. Given those facts, I’m not agreeing with Taibbi’s view these guys will never get charged although it will take some political balls to get it done.

So with the NY Attorney General having a keen eye on charging Jeffrey and his fellow mortgage traders for criminal acts, a federal housing regulator gunning for him individually in their mega-billion fraud suit, and locals in Aspen pissed off by his personal exclusivity needs; do you think the Hotel Jerome manager is looking a little foolish for telling the Aspen Times a ‘nice family’ had taken over the hotel?

UPDATE 1.16.12: It appears the Verschleiser had a like-minded friend write in to the Aspen Daily News about their weekend news story ‘Renter of Jerome Under Scrutiny for Wall Street Deals’ calling the coverage mean and nasty. His logic was Jeff’s civil fraud suits are old news and he couldn’t understand why the local paper would print news about the background of a part-time resident that had just made national news. Really? First off Jeff’s civil fraud cases are ongoing news and the subject of upcoming trials and just a few weeks ago he was sued again, as a named defendant, for fraud and securities violations. Second, it’s the local papers job to tell the reader who this colorful character is considering his actions, taking over public places for the private use of friends, effected their weekend. Third, it’s actually not the papers job to promote tourism for Aspen nor should they worry about how the reporting of factual events effects dollars spent on Aspen. When that happens then they should just shut the paper down.

Editor’s Note: The link to the 5th Ave apartment is not the Verschleisers but an apartment a few floors above theirs. It is used as an illustration of what apartments in this exclusive building look like. The party photo is a snapshot of the public homepage the Verschleisers used to promote their daughter’s event. It was taken down because I just learned the photographer owns the rights to the photo and thus I don’t have permission to publish it on this site.

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Comments

  1. Mrs. V. broke her leg skiing today.

    • You are right I heard this also from local Aspen reporters. Maybe Amy was distracted thinking about how to explain to Madison why so many people are questioning the way Daddy makes money?

  2. What do billionaire Wall Street BSDs blow their ill-gotten gains on? VH-1 aims to tell you, if you don’t already know. Over the weekend we saw a promo for an upcoming VH-1 show: “The Fabulous Life: Billion Dollar Wall Street Ballers”. It’ll air on Thursday at 11am EDT and again that night at 9PM EDT with additional reruns on the VH-1 schedule. According to VH-1’s teaser/promo, the show features ESL / Sears’ Eddie Lampert, and naturally SAC Capital’s Steve Cohen. It also mentions the millions raised by the Robin Hood Foundation, so we’d guess that Paul Tudor Jones is probably in there too. Surprisingly also featured are accused perv / billionaire Jeffrey Epstein as well as besieged-by-subprime-debt John Devaney (Maybe parting with his “Positive Carry” yacht might not be such a big deal after all — VH-1 says he has 10!).

  3. thank you and matt for bringing attention to this fraud perpetrated on the American people. some of us from occupy aspen picketed the hotel yesterday…dressed as vampire squids and others with pitchforks!

    one would think that we would have 1000 people out in front of the hotel for occupy aspen ….with torches but it is aspen and many are aspirational….plus there were 3 Aspen policemen out in front of the hotel…. really? for protesters.

    but then again—whenever we occupy the aspen art museum, the museum always calls the police on us! to ROLF: google meet the art police.

    • to be fair, the police in Aspen believe in peaceful protest. they came to our occupy group pre- meeting in the library across the street from the jerome to inform us very kindly we could protest on the same side of the street as the jerome.

      my frustration is that our taxes our being used for police to remain on-duty outside the jerome to protect a family that has fraudently taken big $ from our country.

      the people of aspen should be grateful our police and law enforcement believe in our freedoms of expression for peons, for little people.

      normally the opening party for ski week [ gay, lesbian, transgendered ski week]is done at the hotel jerome on sunday night. however, the jerome was already occupied.

      occupy’s protest was pictured on the front page of the aspen times yesterday. thank you teri for your transparency on this issue.

  4. Warren Getchell says:

    You were great on The Keiser Report and you’re even better here. Wonderful reporting, Teri, and I love looking into your eyes.

  5. with everything that this daddy has done, he still has the audacity to go celebrate with such grandeur. The sad part is, knowing those people very well, is that they do not think they are responsible for any of their doings. No, they think they are good people; hey: they donate so much to so many charities! their lazy, materialistic, entitled wives are on so many committees for unnecessary events.. how can WE be bad? I just need a puke bag, that’s all. Oh, and happy birthday Mad!

  6. Are you kidding me, Teri Buhl. People have occasions like this all the time, and it is not unusual for whole hotels in Aspen, and across the world to be rented out. Get some real news, and stop trying to mess with peoples lives.

    • Jane or should we assume a friend of the Verschleiers – I think you are missing the point of Teri and Matt Taibbi’s articles. It’s the way Jeffrey made his money and is throwing it in the face of people who suffered as a result of his actions that is newsworthy. If anyone messed with someone’s life the evidence in the lawsuits Teri is reporting clearly points out Mr. Verschleiser is responsible for that all by himself.

      Teri – thanks for the detailed reporting so we can get a real example of how this wall street dirtbag and his family opperate.

      • Philip, do you think they were trying to get their daughters bat mitzvah publicity? Obviously not. They are not throwing it in anyone’s faces. Veschleiser is a wall street savant, and his wife has money to boot, so get your facts straight

        • Oh I see it’s Amy who is the showey big spender. The moment Jeff and Amy decided to to shut down the hotel’s public bar and exclude the rest of Aspen for their daughters bat mitzvah they only asked for nothing but public comment and outrage.

    • i’m an aspen local and we’re just a little town of 6000 people. everyone is talking about this—at first, we were confused as to why the JBar was closed during a playoff game. we’re big broncos fans.

      then there were 2 front page articles on this wall street guy who is responsible— it’s simply shameful.

      \

  7. Teri Buhl says:

    Hey there Jane, Scott and the other made up names writing in from the same colorado location (ip address) defending the Verschleisers or making threatening comments…please tell Amy and Jeff if they want to comment just email me and we can add their on record statements to the story but getting their friends to write in doesn’t work on this site.

  8. Regina Lech says:

    hehe cool ! I love this one :)

  9. John Q public says:

    You should spend your time on the biggest criminals we have in this country Obama and congress are more responsible than anyone for what went on in Wall Street stop if u want real change dump Obama I guess it’s ok for him to throw big parties with taxpayer money get your priorities straight

  10. I want to tell that after reading your post I have found a lot of interesting a thing in your blog, and I really love it. Watch for good work!

  11. Under most circumstances, I very much enjoy and agree with your insighteful reporting. I fear this story about a reputed bad guy plays up a theme that can leds the reader to negative conclusions about an entire group of people. Is the subjects Jewishness relevant to the story? If no, then it bears no mention. I am concerned that someone inclined to see “the Jews own the media”, the Jews control the banks”, will read this and it will feed their paranoia. There will always be anti-Semites and we can’t control what they will think. But why feed it?

    • Teri Buhl says:

      Howard – The news peg/story started in the local Aspen and Denver Papers Thursday and then hit the national papers Friday and Saturday regarding how much money Jeff and Amy spent on their daughters party which happens to be a Jewish event. Other papers also reported on the public places the Verschleiser shut down to hold their religious event which shines the light on how money is used for exclusivity. I can’t change change the fact the story started with a Jewish event so yes Verschleiser Jewishness is relevant. A story that I was actually last to comment and report on. I’m not going to stop reporting on an event because others might have their own perceptions about ‘group behavior’. If this was money spent by a Wall Street bad actor on a Christian baby’s baptism (say they got a gold bathtub to do it in) I would have reported it with the same gusto and highlighted any religious customs they over spent on or excluded others from also.

      Check out the story I did on a right-wing Christian midwest banker who said God told him to be a banker then was sued for securities fraud and shut down by the FDIC
      http://bankimplode.com/blog/2009/07/16/security-savings-bank-not-so-solid-ground/

      Journalist look for details ( we call it color) about the subject we are writing on to help the readers visualize who is the type of person that would get sued for civil fraud over and over and help bring down a bank which destroyed thousands of peoples jobs and net worth – yet goes on to another high paying job at another bank. In my view everything about that person and their family is fair game.

      The Verschleisers made their own choice to spend publicly like they did and are smart enought to know in these times it could draw the media attention it did.

  12. This whole scandal gets me sick – greedy Wall Street crooks who get away with grand larceny – no arrest – we bail them out – maybe Bernie Madoff should take lessons from this guy – ha ha ha all the way to the bank. SEC where are you – another ex middle class American picking up the tab. No one cares anymore – this country is doomed.