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Suit says Madoff brother squandered trust

Bloomberg News / March 26, 2009
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NEW YORK - Peter Madoff, brother of convicted Ponzi scheme mastermind Bernard Madoff, had his assets frozen by a judge as part of a nearly $2 million lawsuit filed by an investor who lost $470,000.

New York Supreme Court Justice Stephen Bucaria yesterday signed an order temporarily freezing assets of Peter Madoff, who was chief compliance officer of Bernard L. Madoff Investment Securities LLC. He will hold a hearing on April 3.

Peter Madoff served as trustee for a $470,000 inheritance that 22-year-old law student Andrew Samuels received in 2003, said his father, Howard Samuels. The younger Samuels is suing Peter Madoff for $2 million, alleging breach of fiduciary duty by investing the his inheritance with Bernard Madoff.

The order prohibits Peter Madoff from removing, transferring, or encumbering any funds or property and requires him to disclose all assets he owns.

Andrew Samuels's lawyer, Steven Schlesinger, said the order reaches all of Peter Madoff's assets.

Peter Madoff's lawyer, John Wing, did not immediately return a call seeking comment.

Peter Madoff was among the thousands who lost money when Bernard Madoff's scheme collapsed, according to an investor list previously filed in court. Apart from the lawsuit, Peter Madoff has not been accused of wrongdoing.

Bernard Madoff pleaded guilty March 12 to defrauding investors by using money from new ones to pay off old ones in a classic Ponzi scheme. Before his Dec. 11 arrest, Madoff had told his thousands of clients that they had about $65 billion total, prosecutors said. Madoff faces as much as 150 years in prison.

Howard Samuels said that his father-in-law, Martin Joel, worked for Madoff and in 1997 created a trust for Andrew Samuels. Joel died in 2003 and Peter Madoff became trustee of the trust.

Andrew Samuels's suit seeks $1.97 million in damages.

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