Madoff Trustee Sues Charity, Hedge Fund

May 13 2009 | 11:05am ET

The court-appointed liquidator for Bernard Madoff’s firm is keeping busy, filing a pair of lawsuits seeking the return of more than $7 billion from former Madoff clients.

Irving Picard filed the lawsuits against a Picower Foundation official and Harley International (Cayman) in an effort to recoup what he calls “fictitious profits” received by the two. According to Picard, some $6 billion of the $12 billion in total withdrawals from Bernard L. Madoff Investment Securities came in the three months before Madoff’s arrest in December. Madoff has since pleaded guilty to running a $65 billion Ponzi scheme.

“The trustee’s investigation to date has revealed that at least $5 billion of this amount was fictitious profit from the Ponzi scheme,” the complaint alleges.

The lawsuits target Jeffry Picower, both individually and as a trustee for the Picower Foundation, and hedge fund Harley International, which is managed by Euro-Dutch Management. Picower, a prominent educational charity, said it would close in December due to its losses in the Madoff scandal.

Despite those losses, Picard says Picower profited handsomely from the scheme before it collapsed, withdrawing about $6.5 billion from Madoff since 1995.

“In several cases, defendants’ purported annual rates of return were more than 100 percent, with some annual returns as high as 500 percent or even 950 percent per year,” Picard’s complaint alleges.

“Picower and the other defendants were among the primary beneficiaries of this scheme, reaping billions of dollars of other people’s money.”

For its part, Harley allegedly withdrew some $425 million “which it knew or should have known was non-existent principal and other investors’ money.”


In Depth

Part II: Roubini Talks Risk, Recovery And The Threat Of A Triple Dip Recession

Oct 21 2014 | 12:41pm ET

In the second half of our interview with Nouriel Roubini, FINalternatives editor...

Lifestyle

Balyasny Pays Over $6M For Lakefront House

Oct 22 2014 | 10:29am ET

A venture headed by hedge fund manager Dmitry Balyasny just paid $6.2 million for...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Demeter: Family affair

David and James Hamman launched their fundamental Livestock and Grains Program in March of 2010 but it really was decades in the making.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.