Madoff Firm A `Piggy Bank' For Family: Court Papers
Thursday, 07 May 2009

Swindler Bernard Madoff's family were enriched by millions from his firm, which also paid their country club memberships and salaries of boat captains, housekeepers and others who did not work for the company, according to new court documents.

The papers provide more details than previously disclosed about Wall Street's biggest fraud amounting to about $65 billion. The documents were filed on Tuesday evening by the court-appointed trustee winding down the firm.

Trustee Irving Picard argues that the personal wealth and business of Bernard L. Madoff Investment Securities LLC (BLMIS) are inseparable and any proceeds are due to his defrauded customers. He is seeking to consolidate cases in his global effort to recover assets.

For decades "BLMIS was Bernie Madoff and Bernie Madoff was BLMIS, each the alter ego of the other" Picard said in the filing in US Bankruptcy Court in New York.

"This entanglement permitted Madoff, at his whim and desire, to engage in innumerable financial transactions wherein he essentially used BLMIS as his personal 'piggy bank' having BLMIS pay for his lavish lifestyle and that of his family.
"Madoff used BLMIS to siphon funds which were, in reality, other people's money, for his personal use and the benefit of his inner circle. Plain and simple, he stole it."

Madoff's lawyer Ira Lee Sorkin declined comment. Peter Chavkin, a lawyer for the swindler's wife Ruth Madoff also declined comment. Lawyers for other family members including the couple's sons and Bernard Madoff's brother Peter, were not immediately reached to comment.

Madoff, 71, was arrested last December and on March 12 he pleaded guilty to running a massive Ponzi scheme in which early investors are paid with the money of new clients. He is jailed awaiting sentencing in June.

According to an affidavit by an investigator, a former FBI agent, Madoff placed relatives and servants on the firm's payroll as well as a boat captain for long-time employee and right-hand man Frank DiPascali.

They were no records that they worked for the firm. Others including the wives of brother Peter Madoff and a son had corporate credit cards even though they didn't work at the firm.

The case is Securities Investor Protection Corp (SIPC) v Bernard L. Madoff Investment Securities 08-01789 in US Bankruptcy Court for the Southern District of New York


Comments Add New
Write comment
  We don't publish your mail. See privacy policy.
Please input the anti-spam code that you can read in the image.