Posts tagged “investment firm”

The Wrong Madoff Died

December 13th, 2010

Mark Madoff, right, with parents

Mark Madoff’s suicide is blamed on “unrelenting pressure from false accusations and innuendo.” It is a shame that eldest son of the jailed multibillion-dollar fraudster, Bernard Madoff, decided to take his own life at the weekend. It should have been his father.

Madoff, 46, was found hanged in the living room of his New York flat as his two-year-old son slept in a nearby room. He had apparently succumbed to the pressures of being unemployable, socially ostracized and subject to a legal battering that included a lawsuit filed last week naming his young children in an attempt to recover funds lost to his father’s $50 billion Ponzi scheme.

“This is a terrible and unnecessary tragedy,” said Madoff’s lawyer, Martin Flumenbaum. “Mark was an innocent victim of his father’s monstrous crime who succumbed to two years of unrelenting pressure from false accusations and innuendo.”

Madoff, who worked on the trading desk of his father’s firm, and his brother Andrew have been accused in lawsuits of benefiting from the theft of billions of dollars. Irving Picard, the trustee for those who lost money in the Ponzi scheme, has described Bernard Madoff’s sons as treating the fraudulent fund as a “family piggy bank”.

In court papers, Picard said Mark received “astronomical compensation” for his work; it totaled $67 million and allowed him to maintain luxury homes in Manhattan and Connecticut.

“Investment firm funds paid for all aspects of his lavish lifestyle from the purchases of his high-end homes to the mattress and box spring he slept on, the television he watched in his home gym and the outdoor shower in his home,” the lawsuit said.

Picard said that Madoff must have been aware that his father was running a fraudulent enterprise because the returns on investments were not realistic.

“It was – or at the very least, should have been – obvious to Mark that the massive gains reflected in his customer account statements did not reflect actual securities transactions or market conditions,” the lawsuit said. Picard has leveled similar accusations against Andrew Madoff.

Madoff’s sons denied any knowledge of their father’s crimes and they have not been charged with any offences. Mark Madoff took his own life on the second anniversary of his father’s arrest.

The New York Times reported that a person who spoke frequently with Madoff recently said he was in “an increasingly fragile state of mind” as the anniversary approached. The paper said that he had expressed bitterness toward his father and anxiety about the lawsuits against his family.

Days before Madoff took his own life, Picard also filed a lawsuit against his children and those of his brother as part of action against the directors of a Madoff affiliate in London.

The New York Times said that Mark Madoff was particularly upset at the naming of his children as Picard seeks to recover monies that Bernard Madoff gave to his extended family over many years.


Madoff Trustee Picard Scores Big Against Swiss Bank

December 8th, 2010

Irving Picard

It was a good day for Irving Picard, the court-appointed trustee for Bernard Madoff’s investment fund. He has been attempting to claw back some of the money stolen by Madoff’s Ponzi scheme, and today won up to $500 million from Swiss bank Union Bancaire Privée (UBP). The settlement agreement is the largest one yet in the Madoff case.

The settlement brings the trustee’s total recoveries to date to $2 billion. Picard says the $500 million settlement represents “a good faith, complete, and total compromise between the parties” given that he would have sued for $1 billion.

“The UBP settlement agreement is the largest feeder fund bank cash settlement to date and the first major international bank settlement, two important milestones for the overall recovery initiative,” said Picard.

A court document filed by Picard as part of the settlement shows he’s been in negotiations with UBP since 2009. UBP had fed Madoff’s bogus investment firm through its Caymans-based M-Invest feeder fund and an external feeder fund firm, Fairfield Greenwich. UBP denies any wrongdoing in the case.

Picard has filed a flurry of lawsuits in the past few weeks in a race against the December 11 deadline for filing (that date marks the two-year anniversary of Madoff’s arrest for the $65 billion Ponzi scheme).

The UBP settlement may send a chill up the spines of Picard’s other targets—including JPMorgan Chase, from which he’s seeking $6.4 billion; and HSBC, from which he’s seeking $9 billion. Both banks stand accused of aiding and abetting Madoff in his fraud.

The Madoff Ponzi scheme is believed to have cost investors more than $20 billion. Madoff himself is serving a 150-year prison sentence after pleading guilty to the fraud.


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