Madoff Family Members Sued For $199 Million

Oct 5 2009 | 2:18am ET

The court-appointed trustee in the Bernard Madoff case made good on his threat Friday, suing four of the arch-fraudster’s family members for nearly $200 million.

Madoff’s  business was “operated as if it were the family piggy bank,” Irving Picard said in his $198.7 million lawsuit against Madoff’s brother, sons and niece. The trustee said the four Madoffs withdrew some $141 million in fraudulent proceeds of Madoff’s $65 billion Ponzi scheme from Bernard L. Madoff Investment Securities in the six years before his arrest in December, and at least $58 million over the last two years.

Madoff’s brother, Peter, his sons, Andrew and Mark, and Peter’s daughter, Shana, all worked at the Madoff firm, “yet the family members were completely derelict in these duties and responsibilities,” Picard alleged.

“As a result, they either failed to detect or failed to stop the fraud, thereby enabling and facilitating the Ponzi scheme,” he added. “Simply put, if the family members had been doing their jobs—honestly and faithfully—the Madoff Ponzi scheme might never have succeeded, or continued for so long.”

According to Picard, the four used their ill-gotten gains to pay for their personal business ventures and other personal expenses, including their homes, cars and boats, as well as to pay off their (presumably large) credit-card bills.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...