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Thursday, July 29, 2010

Madoff trustee sues family entities

(Reuters) - The trustee liquidating Bernard Madoff's investment firm late on Thursday filed three lawsuits against entities affiliated with family members of the imprisoned swindler, accusing them of taking nearly $200 million of investor cash to fund "lavish lifestyles."

The lawsuits filed in the U.S. bankruptcy court in Manhattan collectively seek to recover more than $30 million, and are the latest effort by the trustee Irving Picard to recoup assets to be distributed to victims of Madoff's estimated $65 billion Ponzi scheme.

One of the cases was filed against a family fund, another against a business that owned oil and gas properties, and a third was against a trading-related business.

In the complaint against the family fund, Picard accused Madoff's brother Peter, sons Andrew and Mark, and niece Shana of failing to perform their senior management duties at Bernard L Madoff Investment Securities LLC, the center of the patriarch's fraud.

"While acting in complete dereliction of their management responsibilities to BLMIS, Peter, Andrew, Mark and Shana were also among the unlawful recipients of close to $200 million of BLMIS customer funds which they used to fund lavish lifestyles," lawyers for Picard alleged in one of the lawsuits.

Bernard Madoff, 72, pleaded guilty in March 2009 to running a decades-long Ponzi scheme. He is serving a 150-year sentence in a North Carolina federal prison.

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