Madoff Trustee Closes Out the Week with a Bang

When Irv Picard makes a promise, he keeps it. A few days ago, the trustee overseeing the Madoff mess said he planned to file a lawsuit against several other members of the Madoff clan—including Bernie's brother, two sons, and niece—for treating the family firm like a "piggy bank." And today he delivered, filing an action in federal bankruptcy court seeking the return of $199 million.

The suit accuses the four of plenty of shady behavior. One thing it doesn't do, though, is suggest any of them played a part in carrying out the Ponzi scheme:

The complaint does not accuse the family members of participating in the Ponzi scheme—indeed, lawyers for all four have repeatedly insisted that their clients had no inkling about the fraud until Mr. Madoff confessed to his sons in December, prompting them to turn him in to the federal authorities. Rather, the trustee's complaint describes the relatives as "completely derelict" in carrying out their professional duties at the federally regulated brokerage firm.

Mark and Andy Madoff's lawyer responded to the suit this afternoon and called the charges "baseless." So you probably want to reserve judgment—and think of them as fine, upstanding citizens who did their utmost to serve the best interests of the firm's clients—until a judge and jury suggests otherwise. That's totally what we're doing!

Trustee Sues Four Madoff Relatives, Seeking $199 Million [NYT]
Madoff's Brother, Sons, Niece Sued for $199 Million [BN]