The Madoff Saga Continues
Dec 21, 2010
Posted by Jody Eisenman | Filed under Uncategorized
Fourteen months ago, I wrote the following: “Picower was accused of “requesting” returns from Madoff each year, such that he withdrew over $7 billion according to Irving Picard, the trustee for the liquidation of the estate. The Madoff story apparently has several more chapters to go.”
Picower was found dead in his swimming pool, ala Brian Jones of the Rolling Stones. This past week, his widow agreed to give back all $7.2 billion that he “earned” from Madoff. Why would she agree to give back all the money? She claims that she wanted nothing to do with the fraud. Was Picower in on this scam? I don’t know, but I find it strange that he was able to “order up returns”, sometimes in excess of 100% in a year. As I have stated previously, its’ hard to believe that Bernie acted all by his lonesome. Irving Picard, the trustee for the victims, has filed suit against many individuals who withdrew money prior to the collapse, in a strategy known as a “claw back”. This is based on the legal theory that since there were no real profits, everyone who was lucky enough to take money out should be forced to return it. The problem with this is that many of these individuals were not only totally innocent, but no longer have the funds to repay it. In addition, since much of the money did not go to Bernie directly but rather through hedge funds, the money will be refunded to these funds. After legal fees, it is not clear how much these victims will ever receive. According to cnbc.com, the recent claim against Shirley Friedman, 85, offered a blunt, familiar argument: Yes, the family’s investment had been wiped out. But over the many years Friedman had been a Madoff client, her annual withdrawals from his funds had exceeded the amount of her late husband’s original investment.
As a result, according to Picard, she owed $3.6 million.
To the family, targeting an old lady with Alzheimer’s disease, and others like her, seemed cruel.
“Many of these people are old, sick, and have been impoverished,” said Richard Friedman. “Some of them are now terrified. They don’t have money to pay an attorney.”
The final chapter on this sad story has yet to be written.
