Madoff Trustee Seeks More Money for Victims

Bernie Madoff's family has been hit with a lawsuit totaling $255.3 million for failing to catch the patriarch's Ponzi scheme.

(May 7, 2012) — Bernard Madoff’s family has been hit with a $255.3 million lawsuit for failing to catch the patriarch’s Ponzi scheme.

The lawsuit alleges that the family should have caught Bernie Madoff’s scheme and must therefore return the benefits to victims, Reuters reported.

The trustee seeking compensation for Madoff’s victims, Irving Picard, told Reuters that family members who worked at Bernard L. Madoff Investment Securities were “completely derelict” in making sure that the firm’s dealings were legal.

The lawsuit adds three former spouses of Madoff’s sons as defendants. The family defendants now include 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 news agency reported that Picard seeks $90.4 million from Peter, $81.3 million from Mark’s estate, $73.8 million from Andrew, $15.3 million from Shana, $27.7 million from Deborah Madoff (who began divorce proceedings against Andrew Madoff in 2008), $27.5 million from Stephanie Mack (Mark Madoff’s) widow, and $2.4 million from Susan Elkin (Mark Madoff’s first wife).

Similar to many others sued by Picard, the defendants have asserted that the trustee waited too long to bring some of his claims to court.

Picard has long been fighting for Madoff’s victims. In August 2011, Picard sued the Abu Dhabi Investment Authority (ADIA), alleging it received $300 million from a major Madoff feeder fund. The lawsuit aimed to recover $300 million, marking the first time Irving Picard targeted a sovereign wealth fund in the scandal. Judge Thomas A. Bishop wrote in the court’s decision obtained by the Daily Fairfield at the time: “Although the plaintiff’s complaint is rich with allegations that the Fairfield Greenwich defendants acted in concert with Madoff or in furtherance of Madoff’s fraudulent plan, it is devoid of any allegation that the Fairfield Greenwich defendants played any role in inducing the plaintiffs to invest in the Maxam Fund or in any other feeder fund, or with Madoff directly.”