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Trustee to Sue Madoff Family for $198 Million

Source: New York Times

Posted on 28 Sep 2009

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The trustee appointed by the court to track down any remaining ill-gotten gold from convicted Ponzi schemer Bernard Madoff announced plans to sue Madoff's two sons, his niece and his brother this week, hoping to recover some $198 million.

The lawsuits will accuse the four family members of breach of fiduciary duty and negligence, among other charges, says trustee Irving H. Picard and his deputy, David J. Sheehan of the Baker Hostetler law firm.

Madoff's sons Mark and Andrew, his brother Peter and niece Shana all were executives with his firm and should have known about the $65 billion fraud that went on for more than 20 years, Sheehan said.

"Whether or not they have a criminal problem we will pursue them as far as we can pursue them," said Picard. "And if that leads to bankrupting them, then that’s what will happen."

Both Mark and Andrew, who have maintained their innocence, are trying to get $90 million they say is owed to them by the their father’s company.

“If you were those sons and you knew today about where all that money came from, wouldn’t you be embarrassed to keep that money?” Sheehan said. “They should give it all back.”

The trustee and his lawyers have filed 13 suits seeking to recover about $15 billion, including one against Madoff’s wife, Ruth, and several claims against big investors who had funneled money to Madoff operations.

Asked whether they were working under the assumption that hidden money remained from the Ponzi scheme, Sheehan said: “Yes, we are.” Picard added, “We’d assume it’s millions and millions of dollars.”

Madoff confessed to one of the largest frauds in Wall Street history in December and is serving a 150-year prison sentence.