Madoff family to be sued over missing billions

Last Updated: Monday, September 28, 2009 - 18:30

New York: Epic swindler Bernard Madoff`s two sons, his brother and a niece will be sued this week for USD 198 million, the trustee winding down the Madoff firm told CBS News` "60 Minutes" broadcast on Sunday.

Sons Mark and Andrew, brother Peter and niece Shana all held executive positions with the firm and should have known about the multibillion-dollar, worldwide 20-year-long Ponzi scheme, trustee Irving Picard and his chief counsel David Sheehan, told the programme.

Wall Street`s biggest investment fraud, a Ponzi scheme in which early investors are paid with the money of new clients, collapsed in the declining economy last December. Madoff confessed to the fraud of as much as USD 64.8 billion and is serving a 150-year prison sentence.

Asked by "60 Minutes" whether investigators were working under the assumption that there was money still hidden, Sheehan said: "Yes, we are" and Picard said, "We`d assume it`s millions and millions of dollars."

Sheehan told "60 Minutes" he estimated about USD 36 billion went into the whole scheme. "About USD18 (billion) of it went out before the collapse. And USD 18 (billion) of it is just missing. And that USD 18 billion is what we`re trying to get back."

New York lawyers Picard and Sheehan said the latest lawsuit to recover money for defrauded investors under the Securities Investor Protection Act would accuse the family members of negligence and breach of fiduciary duty. The lawsuits to be filed in US bankruptcy court in New York would also accuse them of profiting personally in the tens of millions of dollars while working at the firm.

All of the family members have said in previous statements that they had no knowledge of Madoff`s crimes.

The sons withdrew USD 35 million from accounts with little or no investment, Picard told "60 Minutes".
"Whether or not they have a criminal problem we will pursue them as far as we can pursue them," Picard said. "And if that leads to bankrupting them---then that`s what will happen."

The trustee and his lawyers have filed 13 suits already in an effort to recover about USD 15 billion, including one against Madoff`s wife Ruth and several claims against so-called Madoff feeder funds.

Only USD 1.5 billion has been recovered so far and the estimates for the actual money that was lost in the fraud have varied from USD 13 billion to USD 64.8 billion.

The case is Securities Investor Protection Corp v Bernard L Madoff Investment Securities 08-01789 in US Bankruptcy Court for the Southern District of New York (Manhattan)

Bureau Report

First Published: Monday, September 28, 2009 - 18:30

More from zeenews

comments powered by Disqus