The court-appointed trustee overseeing the unraveling of Bernard Madoff's massive Ponzi scheme has filed an amended complaint in which he is seeking the return of $226.4 million from several Madoff family members including Madoff's brother, sons, and niece (the "Madoff Defendants"). Picard had originally filed suit against the Madoff Defendants in October 2009, seeking nearly $200 million.
Each of the Madoff Defendants held senior management positions at Madoff's investment firm, Bernard L. Madoff Investment Securities ("BLMIS"), including:
- Peter Madoff - Chief Compliance Officer
- Mark Madoff (now deceased) - Co-Director of Trading at BLMIS
- Andrew H. Madoff - Co-Director of Trading at BLMIS
- Shana D. Madoff - Compliance Counsel, in- house Counsel, and Compliance Director of BLMIS
Through these positions, each of the Madoff Defendants was tasked with compliance and supervisory responsibilities that Picard alleges should have alerted them to Madoff's fraudulent scheme. This included BLMIS's filing for Investment Adviser Registration with the SEC in 2006, when the number of represented accounts and assets under management contrasted greatly with Madoff's customer list and paper holdings.
Each of the Madoff Defendants received tens of millions of dollars in transfers from Madoff, and also maintained investment accounts in which they withdrew amounts far in excess of their invested principal, making them "net winners" under Picard's terminology. Picard draws particular attention to Peter Madoff's investment account with BLMIS, alleging that while Peter invested only $32,146 - and only fourteen dollars after December 1995 - he made withdrawals exceeding $16 million. As an example, Picard points to the alleged purchase of Microsoft stock in Peter's account in December 2000 that was subsequently sold in January 2002 for $15.4 million - despite previously having no money or securities invested in that particular account. Other Madoff Defendants experienced similar anomalies and astronomical returns in their investment accounts, which according to Picard should have alerted them that the activities were the product of fraud and deception.
In total, Picard is trying to recover $77 million from Peter Madoff, $71.9 million from the estate of Mark Madoff, $64.7 million from Andrew Madoff, and $12.7 million from Shana Madoff.
A copy of the complaint filed against the Madoff Defendants is here.