Legal News

Peter Madoff Cleared to Spend Up to $10,000 Per Month

By Ashby Jones

Associated Press

Peter Madoff, center, arrives at Mineola State Supreme Court, Friday, April 3, 2009, in New York. The former chief compliance officer of Bernard Madoff investment Securities LLC and brother of Bernard will be allowed to spend $10,000 a month for living expenses under an agreement reached Friday between attorneys in a lawsuit accusing him of swindling a college student. (AP Photo/ Louis Lanzano)

Asset freezes are very much with us these days, it seems. The latest news on the frozen-money beat: Peter Madoff, brother of convicted Ponzi-schemer Bernie, will be allowed to spend up to $10,000 per month for living expenses, including mortgage loans and insurance premiums.

The ruling came earlier Friday from the courtroom of New York judge Stephen Bucaria in the Long Island, N.Y., town of Mineola. The hearing followed a decision by Judge Bucaria from a week ago to temporarily freeze the assets of Peter Madoff in a civil lawsuit brought by a Brooklyn Law School student, Andrew Ross Samuels, who claims he lost nearly $500,000 at the hands of Peter Madoff.

The issue at Friday’s hearing was about imposing a more-permanent freeze as the law student pursues recovery. Click here for the WSJ story; here for the AP’s. Click here for an earlier post on the Samuels lawsuit against Peter.

Judge Bucaria shot down a Samuels’s request to continue the freeze, wary of encroaching on the turf of U.S. prosecutors handling many of the same issues in the federal investigation of the larger Bernie Madoff case.

Samuels’s lawsuit alleges that Peter Madoff served as sole trustee between 2003 and 2008 for a trust established for Samuels in 1997 by his grandfather, Martin J. Joel Jr., and breached his fiduciary duty to the trust.

Peter Madoff, as chief rules-compliance officer of Bernard L. Madoff Investment Securities LLC, “had full knowledge that it was a fraudulent Ponzi-scheme and nothing more than an unprecedented fraud,” the lawsuit said. Peter Madoff hasn’t been accused of wrongdoing in the alleged fraud, and a lawyer for Peter Madoff has said his client didn’t know about the fraud.

An interesting detail tucked into the story from the Journal’s Aaron Lucchetti: During the hearing, Samuels’s father, asked to meet with Peter Madoff personally to ask for an apology.

Charles Spada, a lawyer for Peter Madoff, said he was sorry but that it wasn’t possible. Samuels’s wife, Pat, replied that she wanted an apology from Peter Madoff.

Correction: An earlier version of this post mistakenly referred to Judge Bucaria as a federal judge.

Full post as published by Law Blog - WSJ.com on April 03, 2009 (boomark / email).