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Trustee Seeking Repayment for Madoff's Victims Increases Ponzi Scheme Suit to $226.4 million

Irving Picard, the court-appointed trustee for liquidation of Bernard Madoff's now-defunct company, charged with recovering money for victims of Madoff’s Ponzi Scheme, has raised the size of the suit to $226.4 million. The suit's prior damage figure was just shy of $200 million at $198.7 million, when it was first filed in October 2009. Years later, the trustee's complaint has now been amended, thanks to leave granted by Burton Lifland, the case's bankruptcy judge in the Southern District of New York, Manhattan Division. The increase in the trustee's damage calculation is due to newly discovered salaries, bonuses, and compensation the trustee found the Madoff family members were paid from 1993 to 2000. Mr. Madoff has confessed he began his Ponzi Scheme in the 1990s, by bilking clients of his securities firm. However, federal prosecutors refute that date estimation and place the beginning of the scheme significantly earlier.

Background Facts About Madoff Family

The trustee's lawsuit was filed against the Madoff family, while Mr. Madoff, who is now in his 70s, is in prison serving a 150-year term. The Madoff family members are appropriately named defendants, according to the trustee, because they treated Mr. Madoff's firm as if it were the family's private piggy bank stash to raid. Additionally, because of their close familial relationships with Mr. Madoff, both the bankruptcy judge and trustee are not surprised that the Madoff family members readily went along with the scheme for an extended period.

The named defendants comprising the Madoff family in the trustee's complaint are:

  • Bernard Madoff's brother, Peter Madoff, the firm's chief compliance officer
  • Bernard Madoff's son, Andrew Madoff, co-director of trading at the firm
  • Estate of Bernard Madoff's son, Mark Madoff (who committed suicide in December 2010), former co-director of trading at the firm
  • Bernard Madoff's niece, Shana Madoff, firm compliance officer

Trustee Picard is now seeking in his amended complaint, $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.

Key Allegations in the Trustee's Amended Ponzi Scheme Complaint

According to the trustee's complaint in the Ponzi Scheme suit against the Madoffs, the family was entirely derelict in their oversight of the operations at the Bernard L. Madoff Investment Securities LLC. The firm imploded when Mr. Madoff was placed under arrest in December of 2008. In addition to poor oversight and administration of the securities firm, the Madoff family is guilty, in the trustee's eyes, of taking large sums from clients' monies to fund other business ventures and pay for personal expenses such as vacation homes and boats. That said, none of Madoff's family members have been charged with misconduct of a criminal nature. The trustee's suit is a civil one to recover sums for funding a partial repayment to victims. To date, Trustee Picard has filed well over 1,000 suits, representing more than $17 billion in legitimate claims.

If you believe you have been harmed financially as a result of investment with Mr. Madoff's securities firm, it is prudent to contact Trustee Irving Picard as soon as possible. You may also desire to conduct an initial consultation with a bankruptcy, commercial litigation, or securities attorney.