Stanley Chais, LA Money Manager, Sued By NY Trustee In Madoff Scandal

NEW YORK — A longtime Los Angeles money manager and philanthropist raked in more than $1 billion in false earnings from disgraced financier Bernard Madoff, a trustee overseeing the liquidation of Madoff's assets claimed Friday.

In a complaint filed in Bankruptcy Court in Manhattan, court-appointed trustee Irving Picard alleged that Stanley Chais must have known Madoff was running a massive Ponzi scheme and should be forced to forfeit the earnings to help pay claims from thousands of burned investors.

Chais, who also handled investment accounts for Hollywood luminaries such as Steven Spielberg, has insisted he was a victim of Madoff. The swindle, he said, wiped out the Chais Family Foundation, which made millions of dollars in annual contributions to various Jewish causes.

A lawyer for Chais said Friday that he hadn't seen the complaint, but he reiterated the claim the Chais family had been burned by Madoff, too.

"To the extent that the Trustee has alleged that Mr. Chais and his family received any kind of preferential or beneficial treatment from Madoff, it is important to understand that Mr. Chais and his family have suffered astounding and ruinous losses from the Madoff scheme," the attorney, Eugene Licker, said in a statement.

Madoff, 70, pleaded guilty in March to charges that his secretive investment advisory operation was a multibillion-dollar fraud. The former Nasdaq chairman faces up to 150 years in prison.

The complaint against Chais alleges that his family's accounts earned wildly inflated returns _ between 40 percent and 300 percent _ since 1995 through Madoff. The trustee says that the money was never actually invested in the market and that the returns came from the pockets of more recent investors.

The claim "is the first of several actions that will be brought against entities that either acted as insiders with Bernard Madoff ... or that benefited from Madoff's scheme to the severe detriment of other customers of (Madoff's firm)," David Sheehan, a lawyer representing Picard, said in a statement.

Accounts managed by Chais "received unrealistically high and consistent annual returns of between 20 and 24 percent," the complaint said.

The complaint called those returns "implausible." It also claimed that Chais and Madoff had a close relationship spanning decades.

"Chais' telephone number is the first speed dial entry on a telephone list at (Madoff's firm)," the complaint said. "He therefore enjoyed unusually intimate access to Madoff, allowing him an opportunity to gain special access to extensive information about the operations of (the firm)."

Comments

[tango2]

C'mon folks they "deal" among themselves, and this time one of them clean them all.

[LeonBNJ]

We need to see a lot more of those that were or had the legal/fiduciary responsibilty to properly handle their client's monies to face criminal trials and civil lawsuits. Madoff was only the top of this scam pyrimid, others below him who enabled him must pay the price - liteally- as well.

[max08]

HuffPo: Can't you find a photo of Madoff where he doesn't look like George Washington?

[brandnewstuff]

http://www.youtube.com/watch?v=M65zI9LH-as
Just Dance

dance through the paper trials- find the connections to hard cash link everyone together and make more criminal arrest for violating Federal Wire Fraud Law- which are Federal Criminal Statutory Codes
all title 18's

No I do not like this song- I simple gawk ( mess of CIA and disfunctional and BM the same form idiocracy) really all those A$holes did ruin the USA in their own little ways of creative destruction

[RobNYNY1957]

Does anyone know of an online link nto the summons and complaint?

[SanderO]

The use if these charitable foundations to legally shelter the income of the weathy is an outrage, yet most likely will not be stopped.

This practice has been going on since the robber barons did it by stealing and exploiting labor and then "giving back in the form of libraries, museums, concert halls, hospitals and so forth, all bearing their names and effectively washing away their sins.

What we need is progressive taxation and then the government can build these edifices and institutions and can fund the institutions that provide "charitable" services. If this were to happen we wouldn't be needing private charities and endowments.

This nation is run, by and for the wealthy and unless some serious CHANGE takes place it is not going to change.

The good and bad news is that this system is imploding despite the efforts of Obama and his buds from Wall Street to "fix the financial system". It's a matter of time. But the question is after all the pain, and there will be lots, what will we get?

[PaleMail]

Hear! Hear!

[LuciFarr]

What are "false earnings?"
Are they phamtom cash?
Money that never existed or what?

He conned those people out of "hard" cash.
There's nothing "false" abou that.

[justobserve]

It seems this is what it was: "The trustee says that the money was never actually invested in the market and that the returns came from the pockets of more recent investors.­" So his earnings are other people's money lost.

[cycle3man]

Bernie baby looks like George Washington crossing the Delaware in that picture.
As guess what? The bost sank!

[cycle3man]

Throw this crook in jail also. All these high rollers close to madoff knew what was goin' down but could care less less as long as they got theirs before the house of cards collapsed!!!!!

[Freenation]

how come all these alleged crooks are all 'philanthropist'?

[Hdaryl01]

Tax write offs......

[simplelivingmama]

Because they use philanthropy as their cover up. So did the Chais Family Foundation side of things loose money only or did his personal finances take a hit as well? Ya got to wonder.

[PaleMail]

Right you are. These people are yelping about their charitable foundations going down the drain but neglect to mention whether their personal fortunes were with Madoff and if not, why not.