Madoff Probe: Conflict Will Keep Top Prosecutor Off Case

Just days after being appointed, the new chief of the criminal division in the U.S. Attorney's office in Manhattan, Richard B. Zabel, has taken himself off the biggest case his office is handling, the investigation of the Bernard Madoff Ponzi scheme, because his father represents one of the potential targets.

Just days after being appointed, the new chief of the criminal division in the U.S. Attorney's...

Just days after being appointed, the new chief of the criminal division in the U.S. Attorney's office in Manhattan, Richard B. Zabel (right), has taken himself off the biggest case his office is handling, the investigation of the Bernard Madoff Ponzi scheme, because his father, William Zabel (left) represents one of the potential targets.

(Human Rights First)
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"He has recused himself from any involvement in the Madoff case," a spokesperson for the U.S. Attorney's office, Rebekah Carmichael, told ABCNews.com Friday. Zabel's appointment was announced Tuesday. The spokeswoman declined to provide any details about who would oversee and supervise the Madoff investigation.

Click here to go behind the scenes of Brian Ross' investigation into Bernie and Ruth Madoff.

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Zabel's father, William Zabel, represents financier Jeffrey Picower who bankruptcy trustee lawyers have alleged was complicit in the Ponzi scheme. In court documents, trustee lawyers allege Picower was the "biggest beneficiary of Madoff's scheme," clearing more than $7.2 billion. The trustee alleged the money was "a form of compensation by Madoff to Picower for perpetuating the Ponzi scheme."

The U.S. Attorney's office declined to say whether Picower was considered a target of the criminal investigation.

The elder Zabel said his son's decision to take himself off the Madoff case "is entirely appropriate, because of the appearance of a conflict of interest."

On behalf of his client, the elder Zabel has denied Picower played any role in the Madoff scheme. "The Trustee's villainous portrayal of Mr. Picower is unsupported by facts," Zabel said in a recent court filing.

Click here for complete Blotter coverage of Madoff and his Ponzi scheme.