LexisNexis® CLE On-Demand features premium content from partners like American Law Institute Continuing Legal Education and Pozner & Dodd. Choose from a broad listing of topics suited for law firms, corporate legal departments, and government entities. Individual courses and subscriptions available.
NEW YORK - (Mealey's) The brother of convicted Ponzi
scheme mastermind Bernard L. Madoff has agreed to pay more than $90 million to
settle claims that he participated in his brother's massive Ponzi scheme but
could escape any payment under a consent order filed Feb. 6 in a New York
federal bankruptcy court (Irving H. Picard v. Peter B. Madoff, et al. [In
re: Bernard L. Madoff], No. 09-1503, S.D. N.Y. Bkcy.; See October
2011, Page 8).
Under the terms of the consent order, Peter B. Madoff
agreed to pay $90,390,500 in money that he does not have, but Bernard L. Madoff
Investment Securities LLC liquidation trustee Irving H. Picard has agreed to
forbear from seeking to enforce the consent judgment as long as Peter Madoff
"makes reasonable efforts to cooperate with the Trustee in the Trustee's
efforts to recover funds for the BLMIS Estate, including providing truthful
information to the Trustee upon request."
In addition, Picard has agreed to "forbear from seeking
recovery of the Trustee's Claims against [Peter Madoff's daughter,] Shana
Madoff[,] in this Avoidance Action; and . . . immediately voluntarily
dismiss with prejudice the Trustee's claims against [Peter Madoff's wife,]
Marion Madoff," in a separate, related adversary proceeding against her.
Peter Madoff lacks any personal or real property after
agreeing to forfeit $143.1 billion as part of a criminal proceeding against
him, while his wife, Marion, and daughter, Shana, have also agreed to forfeit
their real and personal property to the U.S. government.
Picard sued Bernard Madoff's children, Andrew and Mark,
as well Peter and Shana, in the U.S. Bankruptcy Court for the Southern District
of New York on Oct. 2, 2009, claiming that they used BLMIS, "as if it were the
family piggy bank."
Picard sought to recover nearly $200 million from
"preferential payments, fraudulent transfers, and fraudulent conveyances they
He contended that the defendants "either failed to detect
or failed to stop the fraud, thereby enabling and facilitating the Ponzi scheme
at BLMIS" in violation of U.S. Bankruptcy Code Sections 105(a), 502(d), 542,
544, 547, 548(a), 550(a) and 551 and the New York Fraudulent Conveyance
Act. Claims for constructive trust, an accounting, to set aside
preferences, fraudulent transfers and fraudulent conveyances also were made,
and Picard seeks to recover all money improperly received - identified as at
least $198,743,299 - by Bernard Madoff's family members.
"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," Picard says.
On Feb. 5, 2010, the defendants agreed to a consent order
freezing their assets, limiting their spending ability and requiring them to
seek permission from Picard before making any purchases of more than $1,000.
Sept. 22, 2011, Ruling
The defendants then moved to dismiss the complaint, and
Bankruptcy Judge Burton R. Lifland granted the motions in part and denied them
in part on Sept. 22, 2011.
Bernard Madoff pleaded guilty to 11 federal felony
charges and was sentenced to 150 years in prison on June 29, 2009, for his role
in orchestrating the Ponzi scheme. Picard estimates the total losses to
be more than $18 billion.
Mark Madoff committed suicide in December 2010.
Picard is represented by David J. Sheehan, John Siegal
and Marc D. Powers of Baker & Hostetler in New York.
Andrew and the estate of Mark D. Madoff are represented
by Martin Flumenbaum, Stephen J. Shimshak, Andrew J. Ehrlich and Hannah S.
Sholl of Paul, Weiss, Rifkind, Wharton & Garrison. Peter Madoff is
represented by Charles T. Spada of Lankler Siffert & Wohl. Shana
Madoff is represented by Timothy A. Valliere of Smith Valliere. All are
in New York.
Mealey's is now available in eBook
more information about LexisNexis products and solutions connect with us
through our corporate site.