Madoff Liquidator May Go After Charities’ “Profits”

Irving Picard, the court-appointed trustee charged with liquidating Bernard Madoff’s investment business—Bernard L. Madoff Investment Securities LLC—said he may go after charities to collect “profits” they made from their investments with the admitted scammer. Madoff, 71, was recently sentenced to 150 years in prison for running a massive Ponzi scheme that is estimated to be the largest in history cost investors some $65 billion. reported that Picard could sue those charities that received more money than they invested with Madoff. Picard is legally required to file clawback lawsuits against those investors who profited from the Ponzi fraud, whether or not those investors were aware of the scheme, said Picard, who added that charities are not excused from the “avoidance actions,” according to

“Picard has an obligation to the bankruptcy estate to collect all the assets he can find and in theory he has to treat everyone the same way,” said William Josephson of Fried Frank Harris Shriver & Jacobson LLP, who helped run the New York State Law Department’s Charities Bureau. “The bankruptcy code doesn’t differentiate” quoted, between for- and not-for-profit organizations.

To date, Picard has only gone after those charities he believes were aware of the fraud, for instance, attorney and philanthropist Jeffry Picower and his charity, said A number of Madoff investors are in the spotlight including Picower and Stanley Chais.

According to a prior Wall Street Journal report, there is allegedly evidence that both Picower and Chais told Madoff what return they wanted on their investments with him, and their accounts would eventually reflect those returns. Picard who claims that both sought and received better returns than thousands of other Madoff investors sued both Picower and Chais. According to The Wall Street Journal, those suits allege that Chaise received returns as high as 300% from his Madoff investments, while Picower saw returns of more than 100% in 14 instances, reaching as high as 950%. According to, Picower and his “affiliates” allegedly received bogus profits of nearly $7 billion dollars over two decades. Chais was sued for about $1 billion.

Picard has said that those investors who took more than they gave, received “more than their fair share,” quoted, which noted that in New York state, Picard can legally “claw back” funds removed up to six years prior to Madoff’s arrest this June.

One charity being looked at by the trustee is Hadassah, a Jewish organization that builds hospitals in Israel, explained It seems that, according to someone familiar with the situation, Hadassah invested $40 million with Madoff, but took $130 million in profits, said Of note, Sheryl Weinstein, who was a former chief financial officer who resigned her post in 1997 authored a book published last month in which she alleges she was once a lover of Madoff, reported

Based on how Picard has been handling fraudulent profits in the Madoff scandal, about $90 million of Hadassah’s phony profits could potentially be a target in the trustee’s clawback strategy, which could, in turn, be ultimately returned to duped investors, explained

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