Lawsuit: The Madoff Family 'Piggy Bank' of $198,743,299
Madoff's sons, brother, niece, "completely derelict" in stopping Ponzi scheme.
Oct. 2, 2009— -- Bernard Madoff's Ponzi scheme funded "a family piggy bank" that funneled at least $198, 743,299 of stolen customers' money to his brother, sons and niece, according to a lawsuit filed against the Madoff family today by the federal bankruptcy trustee overseeing the liquidation of the Madoff business.
The suit alleges Madoff's Ponzi scheme might have never succeeded or continued for so long if the family members had not been "completely derelict" in their duties as firm employees.
The suit seeks a return of the money from Madoff's brother Peter, his niece Shana and his sons Andrew and Mark.
Click here to go behind the scenes of Brian Ross' investigation into Bernie and Ruth Madoff.
There was no immediate reaction from lawyers or spokespersons for the family members.
The suit provides new details of the alleged role of the family members, including an allegation that the money was funneled to them through fabricated purchases of stock, which they supposedly then sold for the cash proceeds.
Click here for complete Blotter coverage of Madoff and his Ponzi scheme.
Peter Madoff serves as the firm's chief compliance officer. His daughter Shana "held herself out" as compliance counsel, according to the lawsuit.
Madoff's sons Mark and Andrew shared the title of co-director of trading at Madoff's firm, the suit says.
Andrew Madoff
Fabricated Trades
The bankruptcy trustee, Irving Picard, does not allege that any of the family members knew of the Ponzi scheme but says in their "senior management positions" they were supposed to "insure that suspicious and irregular activity would be caught, reported and stopped."
Peter Madoff "clearly did not carry out this responsibility with any degree of diligence or integrity," the suit alleges.
Shana Madoff "ignored every red flag of the massive fraud taking place right in front of her," according to the document.
Of the sons, the suit says, "had they made even the slightest attempt to fulfill their supervisory responsibilities, they would have been aware that no actual securities transactions were taking place." Either they failed to do their job or "they did so and covered up the fraud," the suit alleges.
According to the document, an account in Peter Madoff's name recorded a fabricated trade in Microsoft stock that gave Peter a $8,752,000 profit in 2002.
The suit alleges he withdrew another $6.9 million in the following years, far exceeding even the "fabricated gains."
The 59-page document lists a litany of alleged fabrications and sham loans that benefited the Madoff family members.
Click here to see the complaint.
Peter Madoff is alleged to have benefited by a total of more than $60,000,000. Mark Madoff is accused of improperly receiving $66,859,000. The figure for Andrew Madoff is put at $60,644,000. Shana Madoff is accused of improperly receiving $10,600,000.
Peter Madoff
As chronicled in The Madoff Chronicles, a new book by Brian Ross released this week, Madoff's sons have denied any involvement in the multi-billion Ponzi scheme orchestrated by their father.
As chronicled in The Madoff Chronicles, a new book by Brian Ross released this week, Madoff's sons have denied any involvement in the multi-billion Ponzi scheme orchestrated by their father.
Fabricated Trades
The bankruptcy trustee, Irving Picard, does not allege that any of the family members knew of the Ponzi scheme but says in their "senior management positions" they were supposed to "insure that suspicious and irregular activity would be caught, reported and stopped."
Peter Madoff "clearly did not carry out this responsibility with any degree of diligence or integrity," the suit alleges.
Shana Madoff "ignored every red flag of the massive fraud taking place right in front of her," according to the document.
Of the sons, the suit says, "had they made even the slightest attempt to fulfill their supervisory responsibilities, they would have been aware that no actual securities transactions were taking place." Either they failed to do their job or "they did so and covered up the fraud," the suit alleges.
According to the document, an account in Peter Madoff's name recorded a fabricated trade in Microsoft stock that gave Peter a $8,752,000 profit in 2002.
The suit alleges he withdrew another $6.9 million in the following years, far exceeding even the "fabricated gains."
The 59-page document lists a litany of alleged fabrications and sham loans that benefited the Madoff family members.
Click here to see the complaint.
Peter Madoff is alleged to have benefited by a total of more than $60,000,000. Mark Madoff is accused of improperly receiving $66,859,000. The figure for Andrew Madoff is put at $60,644,000. Shana Madoff is accused of improperly receiving $10,600,000.
Peter Madoff
As chronicled in The Madoff Chronicles, a new book by Brian Ross released this week, Madoff's sons have denied any involvement in the multi-billion Ponzi scheme orchestrated by their father.
As chronicled in The Madoff Chronicles, a new book by Brian Ross released this week, Madoff's sons have denied any involvement in the multi-billion Ponzi scheme orchestrated by their father.