Legal News

Lawyers Find Work in the Madoff Case But Some Are Victims, Too

By Jennifer Forsyth

Lawyers continue to jump into the Madoff Madness, as burned investors look for someone to represent them in civil suits against Bernard and against the funds that invested with him. The LB has already written about some of these suits, here and here. Even more lawyers are needed, of course, to represent Madoff and everyone else who is on the receiving end of these suits.

But given the fact that Madoff apparently had thousands of clients, it shouldn’t be a surprise that lawyers were also among the victims of the alleged mammoth fraud. Among them is a former Justice Department lawyer, Michael Chaleff, who’s named as a plaintiff in a lawsuit seeking class action status that was filed in the U.S. District Court for Central District of California against Madoff and Stanley Chais, a middleman who funneled investments to Madoff. According to this Sunday LATimes story:

Michael Chaleff is “a former Justice Department lawyer. He’s now a public speaker and entertainer who `specializes in merging the art of magic with the sciences of psychology, mathematics and hypnosis,’ according to his website. Ironically, he also wrote the book `Avoiding the Million Dollar Mistake,’ but it was about salary negotiations, not investments. Chaleff, a UCLA graduate who earned his law degree from the University of San Diego, was part of a 50-member investment group called CMG that lost $75 million to $80 million it gave to Chais’ Brighton Co., according to the complaint. In all, it alleges, Chais managed about 10 such groups of investors.”

According to Reed Kathrein, a partner in Hagens Berman’s San Francisco office which is representing Chaleff, professionals such as lawyers and accountants were likely candidates to invest with Madoff because of the sizable minimum investment–often about $1 million. “When everyone is counted, there are going to be a lot of lawyers who are victims.”

Full post as published by Law Blog - WSJ.com on December 22, 2008 (boomark / email).