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

Q&A: Pantheon’s McCrary Says Private Equity Market ‘Robust’

Dec 17 2014 | 8:32am ET

Dennis McCrary is a partner at Pantheon, a private equity firm with $32.2 billion...

Lifestyle

Cohen Donates $1.5M To GOP Governors Association

Dec 10 2014 | 7:13am ET

The Republican Governors Association raised close to $25 million from October 1...

Guest Contributor

Q&A With Daniel Gallancy: Institutional Interest In Bitcoin Is Growing Steadily

Dec 12 2014 | 7:54am ET

Daniel Gallancy is founder and CEO of SolidX, a provider of total return swaps for...

 

Sponsored Content

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

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

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.