Bernard Madoff scandal: the London connection

THE biggest losers in the Madoff investment scandal include two sisters living in London with strong links to the Wall Street fraudster.

The women, both in their forties, are two of five daughters of Walter Noel, who is understood to have lost $7.5 billion - earning him the unenvied title of being the biggest victim of the world's biggest fraud.

Mr Noel, who runs the US-based investment fund Fairfield Greenwich, was a close friend and associate of Bernard Madoff, the 70-year-old accused of orchestrating the $50 billion swindle.

Mr Noel's largest fund alone invested $7.3billion exclusively in Bernard Madoff Investment Securities. Almost all that money is thought to have now gone.

Two of Mr Noel's daughters have made their homes in London. One of the daughters, Corina, aged 45, is married to Andres Piedrahita, who runs Fairfield's London office. It is likely Mr Piedrahita attracted investors to Fairfield which then put the money into the Madoff fund, essentially a pyramid-selling scam which went undetected for years.

There is no suggestion that Mr Piedrahita is involved in any criminality. The couple are said to divide their time between London and Madrid and previously lived in a townhouse in one of Belgravia's most fashionable squares. They have one daughter, born in London.

Another of Mr Noel's daughters Ariane, 41, lives in one of the smartest streets in Notting Hill with her husband Marco Sodi. Mr Sodi is described as a "star deal-maker" who heads the London office of the American private equity firm Veronis Suhler Stevenson.

Mr Piedrahita is said to have confessed that he and his family are among the biggest losers.

A family friend, the entrepreneur Martin Varsavsky, writing on the American blogsite the Huffington Post, said today: "After a telephone conversation with Andres this morning, I heard that he and many family members including his father-in-law Walter Noel lost enormous amounts of their personal net worth in Madoff's Ponzi Scheme.

"Tragically it seems that Andres and his family took money out from many other hedge funds and recently put it with Madoff as he was one of the only hedge fund managers 'doing well' this year."

Mr Piedrahita, a Colombian who enjoys playing polo, was sent to Europe a decade ago by his father-in-law to open offices in London and Madrid with the aim of raising money from rich Britons, Europeans and financial institutions. Corina describes herself as hedge fund administrator.

Mr Noel's three other daughters are all married to men who work in the Fairfield group.

Fairfield Greenwich's London office refused to answer any questions over its network of London clients. It seems likely however that the Piedrahitas will have included their network of high net worth individuals among their clients. After Corina moved to London she told American magazine Town and Country how Americans had taken over the best streets in Belgravia. "The good old addresses like Eaton and Chester Square hardly have a Brit living in them," she said.

"I love the British schools. They're rigorous and the children wear uniforms and are taught to shake hands and say 'how do you do?'"