Suit: 950% Profit Suggests Fla. Lawyer Was Rewarded for Madoff Investments
Madoff bankruptcy trustee Irving Picard has filed a suit seeking $5.1 billion from a Florida lawyer who ran trust funds and partnerships that invested with Bernard Madoff as well as a charitable fund considered a victim of the convicted money manager.
The suit was one of two actions filed yesterday by Picard seeking a total of $6.1 billion withdrawn from Madoff funds over the last decade, the New York Times reports.
The $5.1 billion claim against the lawyer and investment manager, Jeffry Picower, is the largest single recovery sought by Picard so far, Newsday reports. The suit says Picower and his wife, who founded the educational philanthropy known as the Picower Foundation, should have known about the fraud because of “implausibly high returns,” the Associated Press reports.
The suit said that one of Jeffry Picower’s accounts with Madoff had an annual profit in 1999 of more than 950 percent, according to the New York Times.
The returns “were a form of compensation by Madoff to Picower for perpetuating the Ponzi scheme by investing and maintaining millions of dollars in [Madoff’s firm],” the trustee’s complaint said.
Picower denied the allegations through his lawyer, William Zabel of Schulte Roth & Zabel. Picower and his wife “were totally shocked by [Madoff’s] fraud and were in no way complicit in it,” Zabel said.
The Times reports that some $12 billion was withdrawn last year from accounts with Madoff, most of it by feeder funds that raised investor cash for investment with the money manager, who has since pleaded guilty to running a Ponzi scheme.
The Times reported on the withdrawals based on interviews with several anonymous sources. The story says about $6 billion of the cash was withdrawn just three months within Madoff’s arrest. Several of the funds have already been sued by Picard, a lawyer with Baker & Hostetler.
