Madoff Sons in Trustee’s Crosshairs

Last month we wrote that after months of investigations, Federal prosecutors finally seemed to have been going after members of Bernard Madoff’s family. Meanwhile, victims of what is believed to be the largest Ponzi scam in history, have been long wondering what’s taking so long.

Now, reported Daily Finance, the court-appointed trustee—Irving Picard—in charge of liquidating Madoff’s finances, is preparing to file civil complaints against some members of Madoff’s family. Picard will be going after, said Daily Finance, Madoff’s sons—Mark and Andrew—and his brother, Peter. The complaint will seek $50 million from the family and cited $30 million Bernard loaned his sons and a home purchased in cash by one of the sons for $6.5 million, said Daily Finance.

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 and which has allegedly cost investors as much as $65 billion.

The disgraced financier apologized at his sentencing in June for lying to thousands of investors; deceiving his wife, Ruth; his brother, and his sons, said previously. Peter, the firm’s former chief compliance office has long considered quite vulnerable as far as ongoing investigations are concerned. Both sons managed the trading division of Madoff’s now-defunct investment firm. Although Bernard was initially stripped of $171 billion and all of his personal property, as well as $80 million in assets Ruth claims were hers, the wife of the mastermind still walked away with $2.5 million, more than many of Madoff’s duped investors.

Daily Finance explained that it has been difficult to determine exactly what the family knew of Madoff’s deceit and activities noting that some have pointed out that while it would seem impossible that the brother and sons could be unaware of what was happening, there are those who believe Bernard found his sons to be incapable of handling his business affairs and, thus, kept them ignorant. Regardless, said Daily Finance, the sons received many benefits as a result of Bernard’s schemes.

For instance, while under house arrest and scrambling to move his assets, Bernard sent his sons some very high-end watches as so-called Hanukkah presents including a Paul Newman Rolex Daytona, a Piaget, and a Cartier Tank watch, said Daily Finance. Citing Vanity Fair writer David Margolick, a note with the watches stated: “Dear Mark + Andy, If you can bear to keep these watches, they are given with my love. If not, give them to someone who might. Love, Dad,” quoted Daily Finance.

To date, neither son has visited their father in prison. It also remains unclear why Bernard set three watches to two sons, but some speculation has been raised that the move was made to spark a fight that would bring at least one son back to the father, reported Daily Finance.

Meanwhile, at Bernard’s sentencing hearing, his wife, Ruth, speaking through her attorney, claimed she was also duped, said the Associated Press previously. Her statement, in part said, reported the LA Times that, “Lives have been upended and futures have been taken away. All those touched by this fraud feel betrayed; disbelieving the nightmare they woke to. I am embarrassed and ashamed. 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.”

Yet again, many wonder if all the signs of apparent family discord are simply an act, noted Daily Finance, meant to protect Madoff’s family members.

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