Phony Web Site Targets Madoff Victims, Claims $1.3B Discovered In Hideout

To support claims that the group has been successful in dispersing money, the site took testimony from actual Madoff victims – only the quotes apparently were lifted from a New York Times article and used out of context. It appears the group plagiarized an entire section of the Times article, originally published June 2009, which focused on investors struggling to recover losses.

Burt Ross of Englewood, N.J. was one of those quoted by the Times about his Madoff losses, but said he never talked to anyone from "I-SIPC."

"I have never even heard of that group before and I just can't believe they would use my name in support of this when I don't know anything about it," Ross said. "Apparently there is no end to the evil in the world."

In an attempt to add additional legitimacy to the site's claims, the group quotes and paraphrases Madoff trustee Irving Picard of law firm Baker Hostetler, who is tracking losses from Madoff's Ponzi scheme. In several articles on the bogus site, Picard appears to support the claims that more Madoff money has been found in Malaysia, but he also said he has never talked to anyone from "I-SIPC."

"I have never talked to anybody purporting to represent that entity," Picard said, "I did not give them the information. I don't know where they got it."

Picard declined to say whether Madoff money had indeed been found in Malaysia or if he had been in contact with the Malaysian government, as the site suggested.

"We conduct our investigation quietly," Picard said. "We do not share the information with the public in any way."

Madoff Trustee

But some believe Picard's refusal to provide victims with detailed information about his investigation, outside of periodic briefs on the matter, could lead to such scam Web sites.

"Picard has been keeping his information extremely close to the vest, so it is a situation that can fuel the sort of rumors and conjecture," said Rob Stein, whose in-laws were victimized by the Madoff scam. Stein founded the non-profit Web site "Madoff-help.com" to help other victims.

"Part of the problem is that there hasn't been a more comprehensive disclosure on the trustee's part about what he's doing and who he's going after," Stein said.

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