Legal News

Madoff Case Soon to Become Full-Fledged Family Affair

By Ashby Jones

Each development in the Madoff case has seemed to generate a handful of subsequent questions. Once Bernie went down, for instance, questions were raised about Bernie’s wife, Ruth: Would either federal prosecutors or the trustee collecting owed funds go after her? And what about some of Madoff’s larger investors, like Jeffry Picower or Stanley Chais? Would anyone go after them?

Federal prosecutors have proceeded fairly cautiously, it seems. But the bankruptcy trustee for the Madoff firm, Irv Picard, hasn’t messed around. He’s filed suits against Ruth Madoff, Picower, Chais and others. And now, according to a report from 60 Minutes which aired Sunday, he’s going to go after Bernie’s sons and brother and his niece. At issue, according to Picard: some $198 million. Click here for the 60 Minutes report; here for the brief WSJ story.

Picard told “60 Minutes” he believes $198 million is the amount the relatives siphoned from the investment firm.

Lankler Siffert & Wohl’s John “Rusty” Wing, a lawyer representing Madoff’s brother, Peter (pictured), denied allegations that he was in on the scam.

“I can advise you that Peter Madoff’s wife and daughter are among the many victims of Bernard Madoff’s alleged Ponzi scheme, having lost millions of dollars that were invested with Peter’s brother,” said Wing, in a written statement. “Any suggestion that Peter Madoff knew that his brother was engaged in this Ponzi scheme is absurd.”

Martin Flumenbaum, a lawyer representing Mark and Andrew Madoff, said in a statement that he and his clients “strong disagree with the trustee’s baseless claims.”

Flumenbaum also said the Mark and Andrew Madoff “suffered substantial economic losses as a result of their father’s crimes” and that they “continue to cooperate fully with the authorities in their ongoing investigations.”

Full post as published by Law Blog - WSJ.com on September 28, 2009 (boomark / email).