Bernard Madoff's Family Hit With $255.3 Million Lawsuit

May 7 (Reuters) - Members of Bernard Madoff's family were hit with an
expanded $255.3 million lawsuit, saying they should have caught the
patriarch's Ponzi scheme and must return the benefits to victims.

Irving Picard, the trustee seeking money for Madoff's victims, said
family members who worked at Bernard L. Madoff Investment Securities
LLC were "completely derelict" in ensuring that the investment firm's
operations were legal.

The lawsuit adds three former spouses of Madoff's sons as defendants.
Picard said they were unjustly enriched by the scheme through their
marriages, and that "equity and good conscience" required that they
forfeit money to victims, whom he believes are owed $20 billion
overall.

Picard filed his complaint late Friday with the U.S. bankruptcy court
in Manhattan, one month after winning court approval to add the
spouses. The case has grown from $226.4 million in November, and
$198.7 million in October 2009.

The family defendants are Madoff's brother Peter, who was the Madoff
firm's chief compliance officer; son Andrew, who was co-director of
trading; the estate of son Mark, who was also co-director of trading
and committed suicide in December 2010; and niece Shana, a compliance
officer.

The spouse defendants are Deborah Madoff, who began divorce
proceedings against Andrew Madoff in 2008; Stephanie Mack, Mark
Madoff's widow; and Susan Elkin, who divorced Mark Madoff in 2000.

Picard now seeks $90.4 million from Peter Madoff, $81.3 million from
Mark Madoff's estate, $73.8 million from Andrew Madoff, $15.3 million
from Shana Madoff, $27.7 million from Deborah Madoff, $27.5 million
from Mack, and $2.4 million from Elkin. Some claims overlap.

Like many others sued by Picard, the defendants have said the trustee
waited too long to bring some of his claims. The family defendants
have long said their activities at Madoff's firm were legitimate, and
that Bernard Madoff betrayed them.

Bernard Madoff was arrested on Dec. 11, 2008, and pleaded guilty three
months later. Now 74, he is serving a 150-year term in a North
Carolina prison.

Litigation has prevented Picard from distributing much of the $9.1
billion he has recovered for victims. Just $1.1 billion has been
distributed, including $791 million from the Securities Investor
Protection Corp, Picard said in a April 25 filing.

The trustee is appealing several court decisions dismissing many of
his biggest claims, largely against banks that dealt with Bernard
Madoff. Through March 31, the cost of winding down Madoff's firm
totaled $553.7 million, including $272.8 million of fees and expenses
for Picard and his law firm.

The case is Picard v. Madoff et al, U.S. Bankruptcy Court, Southern
District of New York, No. 09-ap-01503.

Comments

[jacmed]

11:19 AM on 05/08/2012

Oh, bull crappy! The SEC was monitoring Madoff's company and they dropped the ball! Should they also be named in the lawsuit? It's going to be very difficult to prove that the defendants actually did know what was going on and I'm anxious to see how Picard goes about accomplishing that goal. should be interesting!

[chinagate]

10:19 AM on 05/08/2012

From what I have read, this is a real kosher affair...Madoff only dealt with fellow Jews in scheme, and deep down hated them more than Christians.

[jacmed]

11:28 AM on 05/08/2012

You are 100% incorrect on this one, chinagate. Yes, most of his original clients were Jews but, just like anybody in business, he drew his original client base from the people with whom he was most familiar. Did you ever have a child in your family sell Girl Scout Cookies? If so, then you know that the first people she sold them to were relatives and family friends. Here's a link showing that Madoff's clients came from all religions and all walks of life. Also, you will find that he was a big contributor to Israeli and Jewish charities - something that would show he didn't hate Jews. BTW - I'm not condoning what he did or sticking up for him, just pointing out how incorrect you are, chinagate.
http://www.rense.com/general84/amateur.htm

[richh0501]

09:07 AM on 05/08/2012

the security exchange commission examined Madoff's company dozens of times and gave him a clean bill.............can you imagine if they did their job correctly, he would have been caught in the beginning and none of this would have happened...........You talk about being complicit and knowing what is going on, how in God's name can a government agency (that we pay billions to protect us) not see what was going on, all they had to say to Madoff was "we want to see the paper (actual stocks and bond being traded)......now tell me who should be sued........our government is killing us..............

[YeOldeSnark]

11:47 PM on 05/07/2012

This is a drop in the bucket when you consider what these greedy ba*t**ds did to others. I hope there will be many more law suits against them and those who helped them with their so-called "charities". Madoff has plenty of accomplices who helped Madoff and his family rob them in broad day life.

[robadeaux]

09:08 PM on 05/07/2012

$272mil in legal fees? This Picard firm is better at scamming than Maddoff was.

[pixiepotpie]

09:17 PM on 05/07/2012

As least they aren't stealing it from your grandma. Lol.

[Blackspeare]

08:26 PM on 05/07/2012

It appears that very little of the recovered funds haver been distributed to the victims and by the time Picard and his firm finish with all lawsuits and get their fees, the victims will have been victimized once again, but that's the American way----get it while you can get it and don't look back!

[keezze]

07:15 PM on 05/07/2012

This sprinkler sales man turned big shot trader ponze king has done so much damage to so many people and organizations its rediculas. I know the banks insurance regulatory againcies and many others were in it and I realize their are probably hundreeds still going on. The money should be taken away from the family as they did not earn it. Ethics honesty trust and compassion used to be valued trates. Now the culture of greed hate and theft is the way things seem to be.

[storytellerjmc]

07:08 PM on 05/07/2012

And executives at the SEC, who were asleep at the switch, should spend the remainder of their lives in prison for "depraved indifference" !

[ispeakthetruthinpa1]

06:31 PM on 05/07/2012

WHY wasn't this done a long time ago?

[tnjr]

06:28 PM on 05/07/2012

Another lawyer sucking blood from a stone. Picard's firm got "$272.8 million of fees and expenses" already. There should be a cap on whatt the firm can get. Money should go to the victims and not the lawyers, who benefit from fravilous lawsuits to keep the case open. For every lawsuit the lawyers lose, they shuld not be able to charge for. The Wilpons, Chase, UBS are all basically getting tossed.

[vietnamvet1967]

06:24 PM on 05/07/2012

Well that does it, People should know that having sex can cause children, so now where is tawsuit on this

This is a BS lawsuit, These courts have turned into a Joke , and the Government has let them

[clwgeorgetownlaw]

05:22 PM on 05/07/2012

A frivolous suit with no basis in law -- It will likely get bounced by the first judge that sees it.....I am not a fan of Madoff (no one is) but lawsuits have to have a legal basis to go forward. "Should have caught the scheme" is interesting coffee table conversation but is an invalid claim as bais of a suit....

[Celeste5793]

05:46 PM on 05/07/2012

His wife supposedly worked with him as did his sons so I don't think the lawsuit is frivolous at all.

[pixiepotpie]

09:26 PM on 05/07/2012

What's really interesting (and by "interesting," I mean horribly unjust), is how in a liquor store robbery, the getaway driver goes to jail too, but if you steal Billions, only the top dog does the time and everyone walks away with all their stolen money.

[JWal196665]

05:16 PM on 05/07/2012

I find it totally impossible that the family members in the positions they had with Madoff's firm were clueless, give me a break. As long as the SEC was looking the other way the family was raking in the loot, then when they did get caught the boos (Bernie) went to prison and they ran with their ill gotten gains and claimed innocent. What a wonderful bunch the Madoff family raised, I personally hope every one of them has to forfit every nickle they have. Although unfortunatly, the attorneys are the ones who will get the bulk of the money.

[quindy]

05:04 PM on 05/07/2012

It would be nice to see Huffington Post stop posting Stephanie Mack's articles. It's sickening to give her space to whine about her hard life.

[belldn3]

04:54 PM on 05/07/2012

Good for them.