Bernard Madoff

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http://noir.bloomberg.com/apps/news?pid=20601110&sid=aAsGs9XY.c4Y


Madoff Investors, Family Sued By Trustee Over Profits
By Bob Van Voris and Edvard Pettersson

Nov. 27 (Bloomberg) -- Bernard Madoff’s investors, employees and family members including his wife were sued by a trustee seeking to recover as much as $69 million in fake profits they received before the con man’s firm collapsed.

New York attorney Irving Picard, appointed trustee by a federal bankruptcy court, yesterday sued people who allegedly invested with Madoff and withdrew more money than they contributed. Picard, with the approval of the Manhattan judge overseeing the liquidation of New York-based Bernard L. Madoff Investment Securities LLC, has filed such “clawback suits” in an attempt to obtain as much as $17.5 billion for victims of the largest Ponzi scheme in U.S. history.

Picard said in a statement late yesterday that those targeted in this latest round of lawsuits are family members and employees, or their relatives. In some of the complaints filed yesterday in U.S. Bankruptcy Court, he didn’t identify the defendants as having such connections to Madoff.

“The transfers received by defendant constitute non- existent profits supposedly earned in the account, but, in reality, they were other people’s money,” Picard said in a complaint seeking $2.8 million from David Washburn, a Madoff investor. Washburn didn’t return a phone call seeking comment.

$14.1 Million
Among those sued were Bernard Madoff’s wife Ruth, Picard said in the statement. Also named in a complaint was Marion Madoff, the wife of Madoff’s brother Peter, who Picard said received $14.1 million in customer funds that should be returned. Picard already sued Peter Madoff in October, 2009.

Charles Spada, a lawyer for Peter Madoff, didn’t immediately return a call to his office after business hours yesterday. Peter Chavkin, a lawyer for Ruth Madoff, didn’t immediately return an e-mail or call seeking comment made after regular business hours today.

“We have been in touch with each defendant and their counsel, seeking a prompt settlement of these claims and an out- of-court resolution,” Picard said in the e-mailed statement. “However, as these attempts have not reached a satisfactory conclusion, we are moving ahead with litigation.”

The new complaints follow more than two dozen filed by Picard seeking to recover more than $17.5 billion from various parties, including Madoff’s friends and family, and from feeder funds, which directed most or all of their clients’ money to Madoff. One of the suits, filed Nov. 23, seeks $2 billion from UBS AG over claims the Swiss bank aided Madoff’s fraud.

Madoff, 72, is serving 150 years in prison after pleading guilty to orchestrating the fraud that destroyed his New York- based firm, which collapsed in December 2008.

At the time of his arrest, Madoff’s financial statements reflected 4,900 accounts with $65 billion in nonexistent investments, according to Picard. Investors lost about $20 billion in principal.

The bankruptcy case is SIPC v. Bernard L. Madoff Investment Securities LLC, 08-1789, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

 

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http://noir.bloomberg.com/apps/news?pid=20601110&sid=agQEXf3Vkohg


JPMorgan Sued for $6.4 Billion Over Madoff Fraud
By Bob Van Voris

Dec. 2 (Bloomberg) -- JPMorgan Chase & Co., Bernard Madoff’s “primary banker,” was sued for $6.4 billion by the trustee liquidating the imprisoned con man’s former firm.

Irving H. Picard, the lawyer appointed as trustee by a New York bankruptcy court, said in a statement that he sued JPMorgan today over claims the bank aided and abetted Madoff’s fraud. Picard said his suit seeks $1 billion in fees and $5.4 billion in damages.

“JPMorgan was willfully blind to the fraud, even after learning about numerous red flags surrounding Madoff,” David J. Sheehan,” counsel to Picard, said in the statement. “JPMC was at the very center of that fraud, and thoroughly complicit in it.”

Any money recovered from JPMorgan will be returned to Madoff’s victims on a pro rata basis, Picard said.

“JPMorgan did not know about or in any way assist in the fraud orchestrated by Bernard Madoff,” the bank said today in a statement. JPMorgan, the second-biggest U.S. bank, called Picard’s claims “irresponsible and over-reaching.”

The bank, based in New York, said it has assisted Picard in his investigation of Madoff’s firm.

The lawsuit was filed under seal in U.S. Bankruptcy Court in Manhattan, according to Picard’s statement.

JPMorgan “has designated virtually all of their information as confidential,” Picard said. “We intend to move to have the complaint made public as soon as possible.”

Second-Biggest
The suit is the second-biggest filed by Picard in the Madoff bankruptcy, after a $7.2 billion claim he filed against investor Jeffry Picower in May 2009. Picower died in October 2009.

On Nov. 23, Picard sued UBS AG for at least $2 billion, claiming the Swiss wealth-management firm also helped Madoff in his fraud. UBS said it bears no responsibility for Madoff’s crimes.

Madoff, 72, is serving a 150-year sentence after admitting he directed the biggest Ponzi scheme in history.

At the time of his arrest in December 2002, Madoff’s account statements reflected 4,900 accounts with $65 billion in nonexistent investments. Investors lost about $20 billion in principal.

The case is Picard v. JPMorgan Chase & Co., 10-ap-4932, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

 

[sr71plt]

A whole bunch of copyright violations. Forum Rule #3.

 

[trysail]

http://www.npr.org/2010/12/11/131988698/madoff-s-son-found-dead-of-apparent-suicide


Madoff's Son Found Dead Of Apparent Suicide

A law enforcement official tells The Associated Press that a son of jailed financier Bernard Madoff has been found dead in New York City of an apparent suicide.

The official says Mark Madoff was found hanged in his Manhattan apartment.

Picard announced yesterday that he had settled potential claims against a group of charities and non-profit organizations that profited from their Madoff investments for more than $80 million.

One settlement announced, with Hadassah, the Women’s Zionist Organization of America Inc., will add $45 million for distribution to Madoff victims, Picard said in the statement.

Hadassah’s former finance chief, Sheryl Weinstein, wrote in a book published last year about an affair she had with Madoff.

 

[AllardChardon]

I just read that article. What a mess.

 

[Dragonlipz]

So it goes....Bernie will reap what he has sown.........like everyone else.........

 

[AllardChardon]

Yes, but to hear this news in jail is something ole Bernie never saw coming through all his greed.

 

[trysail]

http://www.npr.org/2010/12/13/132032517/madoff-s-victims-may-still-have-more-to-lose


Madoff's Victims May Still Have More To Lose
by Jim Zarroli

...James Cox, a law professor at Duke University, spoke with NPR about Picard's efforts and some of the other legal issues that remain unresolved two years after Bernard Madoff's arrest. Here, a condensed version of the conversation:


Q: Picard recently filed numerous lawsuits against people and institutions involved with Madoff. How does he hope to get money from them?

A: Picard essentially represents the creditors of Bernie Madoff, which is an extensive group. So, Picard's task is to retrieve the assets for which the creditors have a cause of action. He's filed these suits based on a couple of theories.

One theory involves the so-called forwarding brokers or investment advisers who were recommending to their clients that they invest their money with Madoff. Picard has alleged that several of them were reckless in not being aware that Madoff was engaged in a huge Ponzi scheme, or that they just turned a blind eye to it.

The other suits that are going forward are to some extent more intriguing, because Picard is trying to retrieve what are called "fraudulent conveyances." In other words, Madoff was taking money from investors in his fund today to pay to investors who made payments to him a week ago. So, investors who gave money a week ago actually benefited from the fraud that was being perpetrated on the newer investors. That's the essence of a Ponzi scheme.

So, Picard is attempting to retrieve funds that were paid to those who got back more money than those who subsequently invested.


more...

 

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http://noir.bloomberg.com/apps/news?pid=20601087&sid=aSxpSChiX_Iw&pos=1


Madoff Trustee Makes It Halfway With $7.2 Billion Deal
By Joshua Gallu, Bob Van Voris and David Voreacos

Dec. 17 (Bloomberg) -- Irving Picard, the trustee liquidating Bernard L. Madoff’s failed investment firm, will collect $7.2 billion from the estate of philanthropist Jeffry Picower, bringing to $9.8 billion the amount collected for victims.

Investors in Madoff’s Ponzi scheme, the largest in U.S. history, claimed losses of principal totaling $20 billion and paper losses -- including fake profits -- of about $65 billion. Picard has filed lawsuits over the past two years seeking the “clawback” of more than $50 billion.

Picower’s estate will pay $5 billion to Picard and $2.2 billion to U.S. authorities to resolve claims that he profited from the fraud, according to separate statements today from Picard and the office of Manhattan U.S. Attorney Preet Bharara. The settlement, for the amount Picard sought, would be the biggest so far. He had already recovered $2.5 billion.

“They’re getting the whole thing?” said Madoff investor Timothy Murray, 58, of Minneapolis. “Wow. That’s great. That’s wonderful. I’m beginning to think that there’s a real possibility that Picard could pay all the claims he approved and there could be extra money.”

Picard, a court-appointed trustee, approved 2,232 investor claims for recovery as of Sept. 30 and rejected 11,171 on the ground that the claimants took more from their accounts than they invested. Murray said he and his family invested $12 million over two decades and are among those rejected.

Heart Attack, Drowning

Picower, 67, a billionaire, had a heart attack and drowned in his swimming pool in Palm Beach, Florida, in October 2009.

Picower, his family and related entities, beginning in the 1970s, deposited $619.4 million with Madoff and took out $7.8 billion, ...


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http://noir.bloomberg.com/apps/news?pid=20601087&sid=aSxpSChiX_Iw&pos=1

 

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http://noir.bloomberg.com/apps/news?pid=20601110&sid=aOL19NuJRVAA


Madoff Investors Seek to Overturn Trustee Rule on Losses
By Bob Van Voris

March 3 (Bloomberg) -- A group of victims of Bernard L. Madoff’s Ponzi scheme told an appeals court that the trustee liquidating the con man’s former firm is using the wrong formula to determine who should recover part of their investments.

The trustee, Irving Picard, shouldn’t use the difference between what an individual put into Madoff’s firm and the amount withdrawn to calculate losses, a lawyer for investors argued today to judges of the U.S. Court of Appeals in New York. The investors want losses based on what their statements from the firm showed.

“The customers’ account statements are the beginning and the end of the inquiry,” Barry R. Lax, a lawyer for the Madoff investors, told the court.

Picard’s “net equity” rule is supported by the bankruptcy judge overseeing the case and by the Securities Investor Protection Corp., which named him trustee. He maintains that calculating losses based on the phony account statements would permit Madoff to be the judge of who won and lost in his fraud.

Picard has recovered about $10 billion for victims of the fraud. He filed hundreds of suits seeking the return of profits from those who withdrew more than they invested, so-called net winners. That group includes Sterling Equities Inc., owners of the New York Mets baseball team...


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http://noir.bloomberg.com/apps/news?pid=20601110&sid=aOL19NuJRVAA

 

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http://www.bloomberg.com/news/2011-...t-ruling-on-calculating-investors-losses.html



Madoff Trustee Wins Appeals Court Ruling on Calculating Investors’ Losses
By Bob Van Voris and Linda Sandler
Aug 16, 2011

The trustee liquidating Bernard L. Madoff’s former firm won an appeals court ruling that affirmed his method of determining which investors can recover money lost in the Ponzi scheme.

The federal appeals court in New York said today that trustee Irving Picard can calculate losses by subtracting the amount withdrawn from an investor’s account from the total placed with Madoff, the so-called net investment method.

A group of Madoff victims urged the court to require Picard to use their final account statements, reflecting fictitious profits on money Madoff never invested, to determine losses. Today’s ruling limits the number of victims who can claim money from the fund Picard oversees and reduces the amount of many eligible claims.

“Mr. Picard’s selection of the net investment method was more consistent with the statutory definition of ‘net equity’ than any other method advocated by the parties or perceived by this court,” Chief U.S. Circuit Judge Dennis Jacobs wrote in the opinion.

Picard has sued investors, banks and others he claims profited from Madoff or should have known of his fraud, seeking a total of about $100 billion. He has raised more than $8.6 billion, or almost half the $17.3 billion in principal he calculates investors lost in the fraud, including a $1 billion settlement with hedge-fund firm Tremont Group Holdings Inc., which was announced July 28.

Money From Accounts
Madoff investors who removed more from their accounts than they invested, including the owners of the New York Mets baseball team, stand to lose from today’s ruling. Picard has claimed $300 million in fictitious profits from a group of defendants tied to Mets owners Fred Wilpon and Saul Katz. He is also seeking $700 million in principal from Wilpon and Katz, claiming they should have known Madoff was running a fraud.

The Mets owners are seeking to have Picard’s suit dismissed.

Karen Wagner, a lawyer for Wilpon and Katz, didn’t immediately return calls seeking comment on the ruling.

Picard’s loss calculation method also reduces the amount of payouts to Madoff investors by the Securities Investor Protection Corp., which reimburses defrauded investors up to $500,000 per account. Picard represents SIPC...

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http://www.bloomberg.com/news/2011-...t-ruling-on-calculating-investors-losses.html

 

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http://www.bloomberg.com/news/2011-...es-jewish-association-for-5-2-million-1-.html


Madoff Trustee Sues Jewish Association
By Linda Sandler
October 14, 2011

The liquidator of Bernard L. Madoff’s firm sued the Jewish Association for Services for the Aged for $5.2 million in fictitious profit over six years.

Trustee Irving Picard lost his bid to claw back six years of Ponzi proceeds from the New York Mets owners last month, when U.S. District Judge Jed Rakoff cut a $1 billion suit by two- thirds, saying he could take back only two years of withdrawals.

In today’s suit against the Jewish Association, filed in U.S. Bankruptcy Court in New York, Picard said he’s entitled to claim six years of transfers under state and federal laws. The trustee last week asked Rakoff to allow him to appeal the Mets ruling.

“It suggests that he thinks he can get the Rakoff ruling overturned,” said Stephen Lubben, a bankruptcy law professor at Seton Hall University in Newark, New Jersey, who posted comments about last month’s ruling on a blog, Credit Slips.

Picard said in court papers last week that Rakoff’s ruling on his lawsuit against the Mets owners, Fred Wilpon and Saul Katz, “arbitrarily” gave them some of the confidence man’s investors fictitious profits from the Ponzi scheme that “all customers were previously denied” by a higher-court ruling.

According to Rakoff, Picard can’t take back so-called settlement payments made by the Madoff brokerage to its customers. Picard is free to try to take two years of withdrawals, he ruled.

Impact of Ruling
The two-year limit and another aspect of the ruling may cost Picard $6.2 billion in potential recoveries through lawsuits, the trustee has said.

***​

In another case, U.S. District Judge Kimba Wood ruled that Picard’s theories were valid when he sued investor Ezra Merkin, and the trustee may be relying on that decision to sue the association, said Peter Henning, a law professor at Wayne State University in Detroit.

In his complaint against the Jewish charity, Picard said the charity had an account with Madoff in New York, and took out “non-existent profits supposedly earned in the account” over six years that were “other people’s money,” because the con man paid “profit” using new money coming in.

“The trustee is entitled to a judgment against defendant avoiding and preserving the six year transfers,” he says.

David Warren, president of the association, said he was “deeply disappointed” that Picard was taking legal action.

Vigorous Defense
“We will vigorously defend ourselves and will not allow it to distract us from our mission,” he said in a phone interview. The association provides services to the aged in New York.

Warren declined to comment on possible defenses to the suit.

He might try to move the case out of bankruptcy court and into Rakoff’s court, said Henning, the Wayne State professor, who has written articles on the Madoff case. According to Picard, people and companies he has sued in 247 actions are rushing to find new judges.

The case is Picard v. Jewish Association, 11-ap-02773, U.S. Bankruptcy Court, Southern District of New York (Manhattan).



more...
http://www.bloomberg.com/news/2011-...es-jewish-association-for-5-2-million-1-.html

 

[Boxlicker101]

Some of these names sound made up, such as Made off and Rake off.

 

[trysail]

http://www.bloomberg.com/news/2012-...ictim-pay-offs-as-strategy-lies-in-ruins.html



Madoff Costs Surpass Victim Payouts as Strategy Fails
By Linda Sandler
April 30, 2012

Irving Picard, who said last year he hoped to pay investors in Bernard Madoff’s defunct firm as much as $65 billion, has only put his hands on about $2.6 billion to actually give back to customers.

More than three years after Madoff’s epic swindle collapsed, Picard, the trustee responsible for liquidating the firm, has paid investors back about $330 million, while holding about $2.3 billion in customer accounts. About $6.4 billion that Picard has won in settlements with former Madoff investors is being challenged in court and is unavailable for disbursement.

So far, winding down the Madoff estate has cost more than Picard has sent to customers, with total administrative spending as of March 31 at about $554 million, including fees for Picard, his firm and consultants he hired, according to his April 25 report. At the same time, Picard’s strategy of filing $100 billion of lawsuits to claw back money from Madoff winners has largely collapsed, as federal judges led by U.S. District Judge Jed Rakoff in New York have dismissed about $90 billion of Picard’s claims.

“There is a huge risk about making predictions, because you can never be sure what a court will do,” said Chip Bowles, a bankruptcy lawyer with Bingham Greenebaum Doll LLP in Louisville, Kentucky. “People can object to his fees if he spent millions on litigation and promised a lot of stuff and it didn’t work out.”

Claim Prices Slump
As a result of Picard’s setbacks in court, bids for claims on the Madoff estate, which peaked at about 70 cents on the dollar in January 2011, now sell in “the low 50s,” said Joseph Sarachek, CRT Capital Group LLC’s managing director of claims trading.

The price also reflects the likelihood that the payoff for investors who lost money in Madoff’s fraud may be far off, Sarachek said. That in turn makes it harder for claimholders to sell their IOUs at attractive prices.

“It does look like the case is going on for several years,” he said.

Amanda Remus, a Picard spokeswoman, didn’t immediately respond to an e-mail asking if the trustee has revised his estimate of how much he will ultimately pay Madoff customers.

Picard’s latest estimate of the con man’s fictitious customer statements is $52 billion. That includes $17.3 billion in actual money invested, with the rest being the fake profits Madoff invented for customer statements. As of December, Picard estimated the total at $65 billion, before the withdrawal of some claims.

SIPC Payments
The $330 million he has sent to customers, out of the $2.6 billion set aside for them, contrasts with about $800 million they’ve received from the insurance program of the Securities Investor Protection Corp., which hired Picard and pays him.

SIPC, which is funded by brokerage firms, no longer expects Picard to pay all currently allowed claims of $17.3 billion in full, “based on current trustee assets, lawsuits filed, and the estimated possibilities for recoveries arising from that litigation,” the U.S. Government Accountability Office said in a March report.

Even if Picard gets all of the $9 billion he says he has raised, he would need another $8 billion or so to pay the claims, the GAO said.

“SIPC does not now expect this level of recoveries to occur,” the report said.

Picard Fees
As of March 31, Picard himself has been paid about $5.1 million in fees. His law firm, Baker & Hostetler LLP, has been paid about $262.2 million in fees. All professional fees and expenses now stand at about $522 million, with about $31.7 million having been spent on general administrative costs such as office rent and telephones. By 2014, the bill will top $1 billion, Picard has estimated.

Most of the money Picard says he has raised came from settlements, not court victories for his lawsuits, and he is fighting to preserve his exclusive right to sue parties that allegedly profited knowingly from the fraud.

Some customers say he is usurping their rights. After a district judge in March upheld Picard’s $5 billion agreement with Jeffry Picower’s estate -- his biggest settlement by far -- lawyer Helen Chaitman appealed on behalf of a client. Chaitman will “absolutely” take the case as far as the U.S. Supreme Court if necessary, she said in an e-mail -- a process that could take more than a year.

Picower Withdrawals
Picard’s 2009 suit claimed that Picower, one of the con man’s largest individual investors, should have known Madoff ran a Ponzi scheme when he withdrew $7.2 billion from the brokerage. Sarachek said Madoff claim prices were around their peak in January 2011, when a judge approved the Picower forfeiture, with $5 billion going to the Madoff estate and $2.2 billion to the U.S.

Some customers regard the Picower settlement as unfair because it stops them from suing the Picower estate themselves.

Picard says he can’t distribute the Picower money until there’s a final court order that can’t be appealed. He didn’t have to lock himself into waiting for finality, as Picower’s estate didn’t make that a condition of forfeiting money, Chaitman said in a court filing.

The delay in paying customers “is totally of the trustee’s own making,” she said. Chaitman has also challenged most of his fee requests.

“Unfortunately, Madoff’s victims have not received the benefits of Mr. Picard’s services,” Chaitman said in an e-mail.

Overlapping Claims
Picard opposes her right to sue the Picower estate, saying her claims overlap with his, which take priority as he is trustee. Moreover, if Chaitman wins the right to sue the Picower estate for her customers, and wins her suit, she may be choosing who gets the money. Only the trustee can claw back and allocate money allegedly stolen from Madoff customers, Picard has said.

Picard’s claim to an exclusive right to sue for Madoff recoveries has embroiled him in a battle with California Attorney General Kamala Harris over investment adviser Stanley Chais’s estate. Harris is trying to pursue a $270 million action against the estate, alleging Chais passed himself off as an “investment wizard” and collected fees for “doing nothing more than funneling all of his investors’ capital into an epic Ponzi scheme.”

Picard sued Harris Jan. 4 in U.S. Bankruptcy Court in Manhattan, saying her suit interferes with the collection of assets needed to help compensate Madoff victims. A Manhattan court hearing is set for May 17.

Tremont Group
Madoff customers also have challenged Picard’s $1 billion deal with Tremont Group Holdings Inc. and a $220 million settlement struck with the heirs of Norman F. Levy. Chaitman alleges that Levy, who died in 2005 at age 93, financed Madoff’s Ponzi scheme to the tune of about $100 billion.

Picard also won’t pay out any more from the customer fund without a “final unappealable decision” on whether he owes them not only the money they invested, but also the fictitious profit on their brokerage statements, according to his website. The owners of the New York Mets baseball team, whom Picard had sued for $1 billion, were among those challenging Picard’s calculation of how they should be paid, until they reached a $162 million settlement that doesn’t require them to pay any money for at least four years, if ever.

The U.S. Supreme Court delayed a scheduled conference on whether it will consider an appeal by Madoff customers who say they should be compensated for loss of profits reported on their brokerage statements until after May 25, when it wants the U.S. Securities and Exchange Commission to weigh in on the subject. Allowable claims would treble to $52 billion if the judges agreed with the customers -- Picard’s current estimate of total fictitious profits in the Ponzi scheme.

The case is Picard v. Katz, 11-cv-03605, U.S. District Court, Southern District of New York (Manhattan).



http://www.bloomberg.com/news/2012-...ictim-pay-offs-as-strategy-lies-in-ruins.html