Madoff relatives may face $198 million suit

Madoff relatives may face $198 million suit

Court-appointed trustee plans to sue sons, brother and niece of convicted swindler - report.


NEW YORK (CNNMoney.com) -- The court-appointed trustee in the Bernard Madoff case plans to sue four more of his family members for nearly $200 million this week, according to a broadcast report.

Irving Picard, the trustee appointed by the U.S. Bankruptcy Court in New York, and his lawyer David Sheehan told CBS' "60 Minutes" that they plan to sue Madoff's two sons, Mark and Andrew, his brother Peter and his niece Shana for $198 million.

The trustee told "60 Minutes" he believes the figure is the amount the relatives siphoned from the investment firm, Bernard L. Madoff Investment Securities, which was a front for a long-running, multi-billion dollar Ponzi scheme.

John R. Wing, a lawyer representing Peter Madoff, denied allegations that he was in on the scam.

"I can advise you that Peter Madoff's wife and daughter are among the many victims of Bernard Madoff's alleged Ponzi scheme, having lost millions of dollars that were invested with Peter's brother," said Wing, in a written statement. "Any suggestion that Peter Madoff knew that his brother was engaged in this Ponzi scheme is absurd."

Martin Flumenbaum, a lawyer representing Mark and Andrew Madoff, said in a statement that he and his clients "strong disagree with the trustee's baseless claims."

"Mark and Andrew Madoff had no prior knowledge of Bernard Madoff's crimes and contacted the U.S. Department of Justice and the SEC immediately after their father told them he had defrauded his investment advisory clients," said Flumenbaum. "By immediately turning him in, the brothers saved the victims of the fraud more than $170 million that their father was about to distribute."

He also said the Mark and Andrew Madoff "suffered substantial economic losses as a result of their father's crimes" and that they "continue to cooperate fully with the authorities in their ongoing investigations."

The suit would be in addition to Picard's $44.8 million lawsuit filed against Madoff's wife Ruth in July, based on the amount of money she transferred from the firm over a six-year period.

Madoff admitted to running the massive scheme back in March, when he pleaded guilty to 11 federal counts. He is serving a 150-year sentence at the Federal Correctional Institution Butner in North Carolina. None of his family members have been charged, though investigators believe that some of them benefited from the ill-gotten gains.

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