Ruth Madoff speaks about Bernie Madoff

NEW YORK — Ruth Madoff — memorably christened "The Loneliest Woman in New York” in a recent New York Times headline — finally spoke out after her notorious husband got a 150-year sentence that probably makes certain she’ll never see him again outside of prison.

"I am breaking my silence now, because my reluctance to speak has been interpreted as indifference or lack of sympathy for the victims of my husband Bernie’s crime, which is exactly the opposite of the truth,” Madoff said in a statement issued through her lawyer.

Ruth Madoff, 68, hasn’t been charged with a crime. But a judge’s order has stripped her of $80 million in assets including a penthouse apartment where she still lives. That’s left her with $2.5 million that couldn’t be linked to the fraud.

Ruth Madoff, though not at the courthouse, later expressed her feelings.

"I am embarrassed and ashamed,” she said. "Like everyone else, I feel betrayed and confused. The man who committed this horrible fraud is not the man whom I have known for all these years.”


by the associated press

Sentence of 150 years for Bernard Madoff

NEW YORK — Two weeks after Norma Hill and her husband invested their life savings with Bernard Madoff, she came to the then-trusted money manager with news her spouse suddenly died.

Madoff "put his arm around my shoulder and assured me my money was safe and I should not worry,” she wrote.

In the end, the widow lost everything.

U.S. District Judge Denny Chin cited Hill’s letter as one of the most stirring examples of an "extraordinarily evil” fraud, one worthy of a staggering sentence for Madoff: 150 years behind bars.

The sentence went far beyond the 12 years suggested by Madoff’s lawyers and virtually guaranteed that, at age 71, the financier-turned-felon would die while imprisoned. Chin said the term was meant to symbolically fit the crime — a multibillion-dollar fraud that’s been called the largest in history.

"Here, the message must be sent that Mr. Madoff’s crimes were extraordinarily evil and that this kind of irresponsible manipulation of the system is not merely a bloodless financial crime that takes place just on paper, but it is instead … one that takes a staggering human toll,” Chin said.

The sentence capped a 90-minute hearing in an ornate courtroom in Manhattan that turned into a tense showdown between a group of angry, tearful victims and Madoff, who sat silently at a defense table before apologizing with a mechanical calm.

"I will turn and face you,” he said. "I’m sorry. I know that doesn’t help you.”


Location is unknown
It was unclear where Madoff, who was returned to a downtown jail, will end up spending time. Chin said he would recommend a facility in the Northeast, but explained that it was up to federal prison officials determine an exact location and level of security.
The sentencing concluded a stunning fall from grace for Madoff. Clients of the former Nasdaq chairman — from Florida retirees to celebrities such as Steven Spielberg, actor Kevin Bacon and Hall of Fame pitcher Sandy Koufax — for decades flocked to him seeking investment returns that defied market fluctuations.

But late last year, Madoff made a dramatic confession: Authorities say he pulled his sons aside and told them of a massive Ponzi scheme.

Madoff pleaded guilty in March to securities fraud and other charges, saying he was "deeply sorry and ashamed.” He insisted that he acted alone, describing a separate wholesale stock-trading firm run by his sons and brother as honest and legitimate.

Aside from an accountant accused of cooking Madoff’s books, no one else has been criminally charged. But the family and the brokerage firms who recruited investors have come under scrutiny.


by the associated press

Court order set to strip Madoff of $171 billion

NEW YORK (AP) — Bernard Madoff would be stripped of all his possessions under a $171 billion forfeiture order handed down only days before prosecutors seek to put the disgraced financier away in prison for the rest of his life.

U.S. District Judge Denny Chin entered the preliminary order Friday, ruling that Madoff must give up his interests in all property, including real estate, investments, cars and boats.

The forfeiture represents the total amount that could be connected to Madoff's fraud, not the amount stolen or lost, and the order made clear that nothing prevents other departments or entities from seeking to recover additional funds.

A call to Madoff's lawyer, Ira Sorkin, after hours Friday was not immediately returned. In a court filing in March, Sorkin said the government's forfeiture demand of $177 billion was "grossly overstated — and misleading — even for a case of this magnitude."

The 71-year-old Madoff pleaded guilty in March to charges that his exclusive investment advisory business was actually a massive Ponzi scheme. Federal prosecutors say Madoff orchestrated perhaps the largest financial swindle in history.

Acting U.S. Attorney Lev Dassin, who released a copy of the order Friday night, plans to seek a 150-year prison term at Madoff's sentencing Monday. Sorkin has argued in court papers for a 12-year term.

According to Friday's order, the government also settled claims against Madoff's wife. Under the arrangement, the government obtained Ruth Madoff's interest in all property, including more than $80 million-worth that she had claimed was hers, prosecutors said. The order left her $2.5 million in assets.

The agreements strip the Madoffs of all their interest in properties belonging to them, including homes in Manhattan, Montauk, N.Y., and Palm Beach, Fla., worth a total of nearly $22 million. The Madoff's must also forfeit all insured or salable personal property contained in the homes.

Other seized assets include accounts at Cohmad Securities Corp., valued at almost $50 million, and at Wachovia Bank, valued at just over $13 million, and tens of millions of dollars in loans extended by Madoff to family, employees and friends.

The judge's order also authorized the U.S. Marshals Service to sell the Manhattan co-op, properties in Montauk and Palm Beach and certain cars and boats.

At the time of Madoff's arrest, fictitious account statements showed thousands of clients had $65 billion. But investigators say he never traded securities, and instead used money from new investors to pay returns to existing clients.

Prosecutors said the total losses, which span decades, haven't been calculated. But 1,341 accounts opened since December 1995 alone suffered losses of $13.2 billion, they said.

"The sheer scale of the fraud calls for severe punishment," the prosecutors wrote in response to the defense motion seeking lighter punishment.

Prosecutors said federal sentencing guidelines allow for the 150-year term, and any lesser sentence should still be long enough to send a forceful message and "assure that Madoff will remain in prison for life."

The government's papers quoted from letters to Chin written by victims of the scheme who are suffering severe hardships. Madoff "ruined lives," one letter said. "He deserves no mercy."

But Sorkin argued in filings that his client deserved credit for his voluntary surrender, full acceptance of responsibility and meaningful cooperation efforts.

"We seek neither mercy nor sympathy," Sorkin wrote.

He urged the judge to "set aside the emotion and hysteria attendant to this case" as he determines the sentence.


by the associated press

Madoff victims pains

NEW YORK (AP) — More than 100 victims of failed financier Bernard Madoff's multibillion-dollar fraud urged a judge Monday to sentence him harshly, saying he ruined their lives, leaving many of them depressed, bitter and hopeless.

"Please don't let his brilliant criminal mind loose to do it again," Steve Norton pleaded in a letter to the judge after describing how he lost $1.1 million in retirement money. "He took the rest of our lives. Don't give him his back."

Kathleen Bignell of Gunnison, Colo., said she told her 89-year-old father he cannot die because she no longer has money to bury him. She said Madoff "ought to be able to look forward to just exactly what he has done to us. No hope, no future and no forgiveness."

In 113 statements, victims from across the country repeatedly referred to the 71-year-old Madoff as a "monster" who, as one victim put it, has "no soul, no remorse, no conscience."

Carl Kornblum wrote that he is 70 years old and his wife is 66, both forced by the Madoff fraud to sell their home and go back to work.

"Can you believe as teenagers and school chums and young marrieds we were once friends with Bernie and Ruth Madoff????" he wrote. "I really can't believe Bernie could be such a sociopathic low-life!!! Thank you for all you can do to see that justice is served on this scoundrel."

Letter after letter urged U.S. District Judge Denny Chin to sentence Madoff to the maximum 150 years in prison after he pleaded guilty in March to securities fraud, perjury and other charges.

Madoff, who has been jailed since he entered his guilty plea, is scheduled to be sentenced on June 29.

Thousands of people lost billions of dollars investing with Madoff, who authorities say confessed to his sons in early December that he had been running a giant Ponzi scheme for decades in which early investors were paid with money collected from later investors.

In the letters, victims urged Chin to show no mercy for the man they described alternately as "wicked," "cruel," "amoral," "heartless, "ruthless" and "arrogant." One letter called Madoff one of the most hated men in the world.

Some of them criticized the government for not doing more to help them. And they reacted angrily at being portrayed in some published reports as greedy, saying they passed up riskier investments that promised higher returns for the steady profits reported by Madoff.

They also urged investigators to keep pursuing probes of Madoff's family members on the belief that some of them had to know about the fraud or even had a role in it.

Ira Sorkin, Madoff's lawyer, said any comment he would make in response to the letters would be made in writing to the judge prior to the sentencing.

Dozens of retired investors said they were forced to look for work to survive after the loss of their investments drove them to put their homes up for sale.

"I can use every superlative in the dictionary, but none would suffice to tell you how damaging Madoff's scheme was," a letter from Ronnie Sue and Dominic Ambrosino said.

Ronnie Sue Ambrosino said the couple had so much faith in Madoff that they put their entire life savings in his hands and even took out a loan to buy a motor home rather than pay for it outright because they did not want to withdraw any of their money from Madoff.

She said when she learned of Madoff's fraud she felt numb.

"The air in the room was thick and there was silence. The birds that had been chirping stopped singing. The squirrels stopped scurrying. The sun stopped shining. There was a void," she wrote. She said her decision to attend Madoff's plea brought her even more pain when she was hit by a van and was left in a cast for eight weeks.

Morton J. Chalek of Port Jefferson Station, N.Y., wrote: "I am 86 years old. I have a broken knee, I have lung cancer and thanks to Madoff, I am now bankrupt."

Jesse L. Cohen of Summit, N.J., told Chin to give him one year off his sentence "for every one billion dollars of hidden money that he reveals. In lieu of that, please make sure that the facility in which he rots is extremely uncomfortable."

"I am broke — robbed by `The Madoff gang,'" wrote Emma De Vita of Chalfont, Pa.

Caren Low of Harrison, N.Y., wrote that her family's name is on buildings at the Albert Einstein College of Medicine, the Hebrew Home for the Aged in New Rochelle and the Hebrew University in Jerusalem. She said they are benefactors of Lincoln Center and founders of the Simon Wiesenthal Center in Los Angeles.

She said she went on anti-depressants after she learned what Madoff had done and is now looking for work.

"It's absolutely revolting," she wrote. "I guess one lesson learned is not to give away too much money before you die as you never know what can happen."




by the associated press

Invoice shows Madoff spending

NEW YORK — The credit card bill is a 30-page study in conspicuous consumption. A quick scan shows a restaurant charge of more than $2,800, $2,000 in spending at a Parisian boutique and $441 at a gourmet bagel shop. The total amount due: more than $100,000. Eye-popping numbers aside, the American Express statement from January 2008 has taken on broader meaning because of the notorious name on the corporate account: Bernard L. Madoff. The vast majority of the charges belong to his family and associates.





wire reports

Bernard Madoff secretary claims his silence is part of his scheme

NEW YORK — Bernard Madoff’s longtime secretary said Wednesday that she believes the disgraced financier is not cooperating with authorities in order to protect others, and that he was a flirtatious boss who frequented massage parlors.

Eleanor Squillari, Madoff’s secretary of more than 20 years, told NBC’s "Today” that she thinks her former boss carefully orchestrated his arrest and that he’s protecting others who might have been involved in his multibillion-dollar scheme by not cooperating with investigators. She declined to speculate as to whom he might be protecting.

Squillari was asked what she would say to Madoff.

"After I stop crying? I would really want to know why he is not cooperating,” she said.

Squillari appeared on "Today” and on ABC’s "Good Morning America” to promote an account of her time working for Madoff that she co-wrote for Vanity Fair. The 59-year-old Squillari spent two months helping the FBI gather evidence against her former employer.

In the article, Squillari said her married former boss was flirtatious and made sexually suggestive remarks. She said she once saw him perusing the escort ads in the back of a magazine and said he frequented massage parlors.

"Once, I looked in his address book and found, under M, about a dozen phone numbers for his masseuses,” she wrote. "If you ever lose your address book and somebody finds it, they’re going to think you’re a pervert, I said.”

Squillari said Madoff often made sexually suggestive remarks.

"‘Oh, you know you’re crazy about me,’ he would say to me. Sometimes when he came out of his bathroom, which was diagonal to my desk, he would still be zipping up his pants. If he saw me shaking my head disapprovingly, he would say ‘Oh, you know it excites you,’” she wrote.

But Squillari told ABC she had a nice relationship with Madoff, despite his ways toward women.

"So, what one person might perceive as inappropriate, I didn’t,” she said. "So, if he made suggestive remarks, I knew it was only meant to be funny.”

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.

Madoff’s attorney, Ira Sorkin, said Wednesday he has no comment on any of the secretary’s allegations.

Squillari said the Madoff who was arrested was not the same man she knew.

She said she was shocked and then angry after his arrest.

And she decided to help the FBI.

by the associated press

Trustee wants to take Madoff's Gains

NEW YORK (AP) — The trustee unraveling Bernard Madoff's Ponzi scheme is threatening legal action to recover $735 million from investors who unwittingly made money off the swindle.

For decades, Madoff paid steady profits to his clients, telling them the money came from the stock market.

But the gains were fictitious. Madoff pleaded guilty last month to stealing from some investors to pay bogus profits to others.

Trustee Irving Picard has sent letters to 223 investors, ordering them to return money they withdrew before the scheme collapsed.

He wants the money to be divided evenly among all victims.

Lawyers representing some of those investors expressed dismay over the letters and said they would challenge their legality.

by the associated press

The Judge Secures Madoff's Assets

NEW YORK (AP) — The government won a battle Monday in its effort to maintain control over Bernard Madoff's assets when a judge protected the assets from being disturbed by investors seeking to force the jailed financier into personal bankruptcy.

U.S. District Judge Denny Chin signed a restraining order preventing more than $100 million in personal assets from being moved, sold or dissipated.

Chin said the order was necessary because there is probable cause to believe the property would be subject to forfeiture to the U.S. government because of crimes committed by Madoff.

Madoff pleaded guilty to fraud charges last month before Chin, who is scheduled to sentence the 70-year-old former Nasdaq chairman to up to 150 years in prison in June. He admitted losing billions of dollars on behalf of thousands of investors.

Some investors, worried that any assets found to be unrelated to the fraud might not benefit investors, said they want to force Madoff into personal bankruptcy proceedings to protect them.

The government argued that the step was unnecessary because it plans to liquidate assets and distribute the proceeds equally to investors. Another federal judge cleared the way for the investors to file the personal bankruptcy proceeding.

U.S. Bankruptcy Judge Burton R. Lifland on Monday ordered the appointment of a temporary trustee to handle issues regarding assets that must be protected for the case to force Madoff into personal bankruptcy that was brought last week by several investors.

U.S. Bankruptcy Judge Burton R. Lifland on Monday ordered the appointment of a temporary trustee to handle issues regarding assets that must be protected for the case to force Madoff into personal bankruptcy that was brought last week by several investors.

Lifland ordered the temporary trustee to coordinate with a trustee overseeing the bankruptcy case involving Madoff's business assets so that any disputes over what happens to assets and how claims can be made are resolved.

Madoff's attorney, Ira Sorkin, had argued against the appointment of an interim trustee, saying that the individual "will be unable to marshal any assets." He said the appointment also will complicate the efforts of the U.S. attorney, the Securities and Exchange Commission and others who are liquidating the assets for investors.

In the document, Sorkin said Madoff cannot violate any restraining orders preventing the movement of assets since he is in prison.

Sorkin, who represented Madoff's wife, Ruth, until several weeks ago, said he had spoken to Mrs. Madoff's lawyer and they both agreed that she owns certain assets "free and clear of any wrongdoing by Mr. Madoff, or to which she has a legitimate, untainted fractional property interest."

Sorkin said that neither the $7 million Manhattan penthouse where Mrs. Madoff resides or a $3 million home in Montauk have been forfeited. But he said an $11 million Palm Beach, Fla., house owned by Mrs. Madoff has been seized by the U.S. attorney with the consent of Mrs. Madoff and it will be sold by the U.S. Marshall Service.

The government has said Mrs. Madoff intends to hold onto up to $69 million in assets, including the penthouse and financial accounts in the name of Mrs. Madoff.

by the associated press

Madoff faces lawsuit from Investors

Over the government's objections, some of Bernie Madoff's investors filed a court proceeding today to force the convicted swindler into bankruptcy -- an attempt to ensure that his remaining assets go toward paying his victims.


From Bloomberg News:

The petition, filed by five investors today in U.S. Bankruptcy Court in Manhattan, seeks to push Madoff into Chapter 7 bankruptcy. The investors said they hold $64 million in claims against Madoff, who pleaded guilty last month to directing the largest Ponzi scheme in U.S. history.

U.S. District Judge Louis Stanton in Manhattan on April 10 reversed his December ruling that prevented investors from filing the request. The Securities and Exchange Commission, the Justice Department and the Securities Investor Protection Corp. opposed the investors’ request.

The SEC said the petition will spawn wasteful litigation, while the office of Interim Manhattan U.S. Attorney Lev Dassin said federal forfeiture law would take precedence over bankruptcy law.

Judge Stanton, however, said the U.S. bankruptcy code was the best system to deal with the claims against Madoff's assets, other than those that prosecutors may force him to forfeit as proceeds from his crimes, Reuters noted.

"A Bankruptcy Trustee has direct rights to Mr. Madoff's individual property, with the ability to maximize the size of the estate available to Mr. Madoff's creditors through his statutory authority to locate assets, avoid fraudulent transfers and preserve or increase the value of the assets through investment or sale," Stanton wrote

Bankruptcy Court trustee Irving Picard has located nearly $1 billion in Madoff assets, the New York Daily News reported.

Also from the Daily News:

Also from the Daily News:

Meanwhile, the swindler's luxury tickets to the Mets home opener at Citi Field on Monday jumped to $2,297 on eBay last night. The $525 tickets are part of the liquidation process.

by the associated press

Madoff funny Pictures

Madoff Trading Division Tentaive Deal in the Works

NEW YORK (AP) — A Manhattan bankruptcy judge approved a plan Tuesday that, barring any sweetened last-minute offers, would allow a Boston firm to take over a securities-trading operation owned by disgraced financier Bernard Madoff.

A court-appointed trustee overseeing the liquidation of Bernard L. Madoff Investment Securities had announced last month that Castor Pollux Securities wanted to buy the former Nasdaq chairman's legitimate market-making business.

Castor Pollux agreed to pay $500,000 at closing and then up to $15 million in revenues from trades through 2012 — a total representing a fraction of what Madoff once estimated his business was worth.

Under an order signed Monday by U.S. Bankruptcy Judge Burton Lifland, the deal with Castor Pollux would go through if more lucrative bids don't surface by April 22. Any prospective buyers offering a $550,000 closing payment or more would trigger an auction on April 27.

Castor Pollux president Darin Oliver said Tuesday that he expects the company to win out.

"It's in everybody's best interest to see this operation prosper," he said.

An action that drives up the price would favor victims of the multibillion fraud because the trustee plans to use sale proceeds to pay their mounting claims. A lawyer for the trustee has said more than $1 billion in assets from Madoff's businesses have been found so far.

Madoff, 70, was jailed last month after pleading guilty to charges that he ripped off thousands of investors. FBI agents arrested him in December after he confessed to his two sons that his secretive advisory service for wealthy clients was a massive Ponzi scheme.

He insisted during his plea that the separate market-making and proprietary trading side of the firm — supervised by his brother and sons — were "legitimate, profitable and successful in all respects." In a document prepared for the Securities and Exchange late last year, Madoff listed the "net value of ownership in business" as $700 million.

Madoff informed investors at the end of November that they had nearly $65 billion in their accounts. But investigators say the total probably was a fabrication based on what accounts originally valued at less than $20 billion would be worth if he had actually delivered the steady profits he reported.

by the associated press

Manager called in Fruad Suit

April 6 (Bloomberg) -- New York Attorney General Andrew Cuomo sued financier Ezra Merkin and his Gabriel Capital Corp. for secretly placing $2.4 billion of client funds with Bernard Madoff, who used the money in the largest Ponzi scheme ever.

Merkin steered the assets to Madoff in exchange for $470 million in fees, Cuomo alleged in a complaint filed today in New York state Supreme Court in Manhattan. Madoff, 70, pleaded guilty in federal court last month to defrauding investors of as much as $65 billion. He faces as many as 150 years in prison at his sentencing in June.

Investors including prominent charities entrusted their funds to Merkin, who held himself out to be an “investing guru” when in reality he was “but a master marketer,” Cuomo said in the complaint. Other Merkin entities included the Ariel Fund, Ascot Fund Ltd. and Gabriel, his management company.

“Merkin was just a ‘glorified mailbox,’” Cuomo said in the filing, using the words of an investor who he said learned in December that Madoff, not Merkin, managed Ascot’s assets.

“This lawsuit is without merit,” said Andrew Levander, a lawyer for Merkin, in a statement. “Investors in all of the funds expressly authorized Mr. Merkin to allocate assets to third-party managers such as Madoff, without giving them notice or obtaining their consent.” Levander said Merkin will fight the lawsuit, which seeks payment of damages, disgorgement of all fees, restitution and “other equitable relief.”

All the Assets

Virtually all the assets in Merkin’s Ascot funds, Ascot Partners LP, and Ascot Fund Ltd. were formed in 1992 as feeder funds for Madoff, according to the complaint. Starting in 2000, Merkin also secretly handed Madoff one-third of the assets from Gabriel Capital and Ariel Fund, Cuomo alleged.

About 85 percent of Ascot’s investors did not know until Madoff’s arrest that he had custody of virtually all of Ascot’s assets, the complaint says. Merkin received an annual management fee of 1 percent from Ascot’s investors until 2002, and it increased to 1.5 percent in 2003.

By mid-2008, Merkin had built up his funds to a stated net asset value of over $4.4 billion, Cuomo said. By “recklessly” turning over funds to Madoff, Merkin lost almost all of the $1.7 billion invested in Ascot and about 25 percent of the $2.7 billion invested in Ariel and Gabriel, totaling approximately $2.4 billion in investor harm, according to Cuomo’s complaint.

Nonprofit Boards

New York alleged that Merkin violated New York’s Martin Act by perpetrating a fraud in connection with the sale of securities; the state’s Executive Law for persistent fraud in conducting business; and New York’s not-for-profit corporation law for breaching his fiduciary duty in connection with serving on the boards of nonprofit organizations.

New York University, which had $94 million invested in Ariel, sued Merkin in December, claiming $24 million in Madoff- related losses.

“We are gratified by the attorney general’s action today on behalf of those who have been harmed by Mr. Merkin, and we will cooperate with their investigation,” NYU spokesman John Beckman said.

Other investors who alleged they were hurt by Merkin’s investments with Madoff include Yeshiva University, which lost $110 million, and New York Law School.

Merkin, an honors graduate of Columbia College and Harvard Law School, resigned as a Yeshiva University trustee and as its investment committee chairman in December and left his post as chairman of the investment committee of UJA-Federation of New York, a charity.

Raising Money

After creating Ariel and Gabriel in 1988, Merkin spent most of his time raising money for his funds through his social and professional networks, allowing third parties to manage the investment activity, according to the complaint.

From 1998 to 2000, Merkin was advised by money manager Victor Teicher, who had been jailed in 1994 in an insider trading scandal, Cuomo said. Teicher also served as Merkin’s primary money manager in the 1980s, Cuomo said. In 2000, Teicher was barred by the U.S. Securities and Exchange Commission from working in the securities industry.

Merkin paid Teicher at least $1 million per year in the late 1990s and gave him responsibility for hiring, firing and compensation at Gabriel Capital, Cuomo said. The relationship continued until at least December.

‘Hilarious’ News

“The Madoff news is hilarious; hope you negotiate out of this mess as well as possible,” Teicher wrote in an e-mail to Merkin on Dec. 12, the day after Madoff’s arrest. Cuomo included the e-mail as part of his suit. “I’m yours to help in any way I can; unfortunately, you’ve paid a big price for a lesson on the cost of being greedy.”

The next day, Teicher told Merkin, “I guess you did such a good job in fooling a lot of people that you ultimately fooled yourself,” according to a second e-mail in the lawsuit.

Also today, Mort Zuckerman, chairman of Boston Properties Inc. and the publisher of the New York Daily News, sued Merkin and Gabriel Capital for $40 million in losses on investments made with Bernard L. Madoff Investment Securities LLC.

“Merkin represented that he ‘exercised reasonable care’ in selecting managers and made ‘periodic reviews,’” Zuckerman said in a complaint filed in New York state Supreme Court in Manhattan. “There is no way Merkin could make such a representation without learning basic facts about Madoff’s operation, including the fact that Madoff had not made any stock purchases for at least 13 years.”

Charity Fraud

In January, Cuomo subpoenaed 15 nonprofit entities in an investigation of alleged charity fraud connected to the Madoff scandal, a person familiar with the probe said at the time.

Cuomo, whose office oversees nonprofits in New York, said then that a number of charities were defrauded by the scam and that their losses might exceed $100 million.

Cuomo is the second state regulator to claim those who ran “feeder” funds for Madoff committed fraud. On April 1, Massachusetts securities regulators accused Fairfield Greenwich Group in New York of defrauding investors by misrepresenting its knowledge of how Madoff ran his investment business.

Fairfield’s Sentry Funds had placed about 94 percent of its assets, or $7.2 billion, with Madoff, Massachusetts Secretary of the Commonwealth William Galvin said. Fairfield has denied any wrongdoing.

“It appears Cuomo’s action was spurred by Galvin’s action last week against Fairfield Greenwich,” said Jake Zamansky, a New York attorney who represents a group of investors in Merkin feeder funds. “These regulatory actions are a very welcome sign for investors seeking to recover their losses.”

Morgan Stanley

New York officials alleged today in their lawsuit that Merkin misrepresented the role of Morgan Stanley by referring to the bank as Ascot’s “principal prime broker.” From at least 1999 through 2008, Madoff, not Morgan Stanley, held virtually all securities purportedly acquired by Ascot, Cuomo said.

“By asking investors to wire their funds to the Morgan Stanley account, and describing Morgan Stanley as a prime broker, Merkin further concealed Madoff’s role in Ascot, and misleadingly gave comfort to investors by claiming that some or all of Ascot’s assets were held at a major brokerage firm,” according to the complaint.

Cuomo said Merkin would deceive investors by saying his employees in his Park Avenue offices managed their funds rather than Madoff.

Merkin didn’t entrust much of his own money to Madoff, Cuomo said in the complaint. Though he got management fees of more than $169 million from Ascot between 1995 and 2007, they were paid to him, not reinvested. Merkin invested $7 million in Ascot in its first six years and less than $2 million the following decade, according to the filing.

The case is New York v. Merkin, 450879/2009, New York state Supreme Court (Manhattan.)


By Karen Freifeld

Brother gets Expense Cash

Bernard Madoff's brother Peter gets access to $ 10,000 a month for livng under an agreement approved Friday in a lawsuit accusing him of swinding a college student . Peter Madoff appealed a judge's order last week freezinng his assets .

That order came in a civil lawsuit filed by Andrew Ross Samuels , who claims Madoff took $ 478,000 of his brother Bernard's Ponzi scheme .

Town Sues Madoff , family

A Connecticut town is suind Disgraced financier Bernard Madoff , his family and two investment companies after allegdly losing millions of pension dollars in Madoff's Ponzi scheme .

The lawsuit was filed Monday by the town Fairfeild and its pension board . The board invested about $ 15 million with Madoff's family and Tremont Partners and Maxam Capital Management for failing to oversee Madoff's investments .

Trustee sells of Part of Madoff's Business

A trustee overseeing the liquidation of disgraced finanier Bernard Madoff's assets has sold a trading operation within his firm that was considered legitimate . A trustee spokesman conifired the sale of the market-making division managed by Madoff's brother and two sons .

Details about the buyer and price of the the purschase were not immediately available .

Liquidating assets to cover claims , the court -appoineted trustee has been liquidating Madoff's business assets -including works of art in his Manhattan office , to cover claims brought by victims of his massive Ponzi scheme .

The 70year old Madoff pleaded guilty earlier this month to fraud and other cgarges .

Madoff told a judge that unlike his secretive investment advisory business the trading was " legitimate in all respects " .

Bernie Madoff , good man that went bad .

Bernie Madoff .

How could a trusted man steel from friends ?

Madoff , was a great man on Wall Street , respected by his fellow investers . I know that I have always said don't trust anyone , but this is pushing my believe to a new height . Bernie Madoff , did he work alone ? Was his sons a part of this con ? Did Madoff have a partner ? If so than who ? Will we ever find who ?

Does Madoff , have a problem mentaly ?

I don't know if we will ever find out . One thing for sure is that alot of good people lost their hard earned money . And wanted to have their part of the American dream . However , that dreamed turned fast into a nightmare . For those hard working Americans , that trusted Bernie with their savings .

Not to even mention the weather Americans , that lost some of their money to Madoff's con .

The greed of Madoff , is truly mind blowing .

I wonder if Bernie Madoff , is just a Patsy . Could there been someone higher up , that master minded the con ?

The FBI , and the press really needs to look deeper , and find out , how long and how much Madoff , took from the investers that trusted Madoff .

Oh , I am sure they will . And I have a feeling that Bernie Madoff , will spill out everything in court .

For once a time ago , he was a good man , that just went bad .