Trustee will sue Madoff's family members for millions
Bernard Madoff's sons, his brother, Peter, and a niece can expect to be sued next week for millions of dollars in compensation, loans and profits, the lawyer for the bankruptcy trustee told Newsday on Friday.
"I am going to sue them, and they know it," said David Sheehan, counsel for bankruptcy trustee Irving Picard.
Sheehan said the planned lawsuit would involve efforts to recoup funds allegedly paid to Madoff's sons, Mark and Andrew, his brother and niece, Shana Madoff, going back as far as six years before the Ponzi scheme was uncovered in December.
The lawsuits are part of a Picard strategy to go after Madoff family members who he believes improperly received customer funds in the form of compensation, loans and other payouts during the life of the estimated $13 billion to $21 billion fraud. Earlier this year, Picard sued Madoff's wife, Ruth, for $45 million.
In an affidavit filed in Manhattan bankruptcy court a few months ago, a consultant for Picard asserted how an investigation revealed how numerous loans totaling millions of dollars were made to Madoff's sons.
Sheehan and Picard will be featured Sunday in a CBS "60 Minutes" interview with Morley Safer talking about the planned lawsuit against the Madoff family members for negligence and breach of fiduciary duty.
In a statement Friday, Martin Flumenbaum, the attorney for Madoff's sons called Picard's charges "baseless" and recalled how the sons turned in their father.
"Mark and Andrew Madoff suffered substantial economic losses as a result of their father's crimes, and we believe it is legally appropriate that these losses be taken into account in resolving the outstanding financial issues," he said in the statement.
Attorneys for Peter Madoff and Shana Madoff, who was a compliance officer for her uncle, couldn't be reached for comment.
Madoff is serving a 150-year sentence in a federal prison after pleading guilty to the fraud in March.