Sunday, 1 February 2015
Last updated 1 day ago
Jul 16 2014 | 3:14pm ET
The trustee in the Bernard Madoff case has mined the trial of five former deputies of the Ponzi scheme mastermind to bulk up his case against Madoff’s sons.
Irving Picard filed a third amended version of his lawsuit against Andrew Madoff and the estate of Mark Madoff, who committed suicide in 2010, two years after his father’s arrest. The new complaint is based in part on the testimony of former Madoff finance chief Frank DiPascali, whose testimony helped convict the former Madoff employees earlier this year.
It also seeks $16 million more from the Madoff brothers than the last amended complaint, bringing the total to $153.3 million.
Picard, in the new lawsuit, alleges that the brothers took a page from their father’s playbook, using sham transactions to inflate their personal account balances and phony loans to buy real-estate. All told, according to Picard, the brothers diverted tens of millions of dollars from their father’s firm. The two also allegedly helped delete, dummy or hide e-mails during a Securities and Exchange Commission audit in 2005.
“The Madoff brothers knew, saw, and were simply too intelligent to plausibly feign ignorance about the fraud that was occurring before, by and around them,” the suit alleges.
“The new allegations are unfounded,” Martin Flumenbaum, a lawyer for Andrew Madoff and Mark Madoff’s estate, said. “As we have stated, neither Andrew nor Mark knew of or knowingly participated in their father’s criminal conduct.”
Bernard Madoff claims to have acted alone, but 15 other people—including his brother, Peter Madoff—have pleaded guilty or been convicted in the case. Neither Andrew nor Mark has faced criminal charges, and both maintained that they ran a legitimate market-making and trading operation at their fathers firm.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…