The court-appointed trustee overseeing the unraveling of
Bernard Madoff's massive Ponzi scheme has filed
an amended complaint in which he is seeking the return of $226.4 million from
several Madoff family members including Madoff's brother, sons, and niece (the
"Madoff Defendants"). Picard had originally filed suit against
the Madoff Defendants in October 2009, seeking nearly $200 million.
Each of the Madoff Defendants held senior management
positions at Madoff's investment firm, Bernard L. Madoff Investment Securities
Through these positions, each of the Madoff Defendants
was tasked with compliance and supervisory responsibilities that Picard alleges
should have alerted them to Madoff's fraudulent scheme. This
included BLMIS's filing for Investment Adviser Registration with the SEC
in 2006, when the number of represented accounts and assets under management
contrasted greatly with Madoff's customer list and paper holdings.
Each of the Madoff Defendants received tens of millions
of dollars in transfers from Madoff, and also maintained investment accounts in
which they withdrew amounts far in excess of their invested principal, making
them "net winners" under Picard's terminology. Picard draws
particular attention to Peter Madoff's investment account with BLMIS, alleging
that while Peter invested only $32,146 - and only fourteen dollars after
December 1995 - he made withdrawals exceeding $16 million.
As an example, Picard points to the alleged purchase of Microsoft
stock in Peter's account in December 2000 that was subsequently sold in January
2002 for $15.4 million - despite previously having no money or securities
invested in that particular account. Other Madoff Defendants
experienced similar anomalies and astronomical returns in their investment
accounts, which according to Picard should have alerted them that the
activities were the product of fraud and deception.
In total, Picard is trying to recover $77 million from
Peter Madoff, $71.9 million from the estate of Mark Madoff, $64.7 million from
Andrew Madoff, and $12.7 million from Shana Madoff,.
A copy of the complaint filed against the Madoff Defendants
For more news and analysis of Ponzi schemes, visit
Ponzitracker, a blog by Jordan Maglich, an attorney at Wiand Guerra King P.L.
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