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Bernard Madoff is in prison. |
The United States may hire Irving Picard, the trustee for Bernard L. Madoff Investment Securities, to help distribute forfeited assets to Madoff’s investors, federal prosecutors said in a court filing.
Picard has so far identified about 2,336 account holders who have collectively lost more than $13 billion, prosecutors said. Thousands more account holders have also submitted claims.
The United States may also use federal forfeiture law to repay Madoff’s investors rather than rely on the restitution statutes, according to the filing. Prosecutors said the distinction matters because restitution law requires them to calculate the amount that victims lost in the case, which is difficult to do. Under forfeiture law, prosecutors said, the Department of Justice will have more discretion in distributing assets.
When Madoff was sentenced on June 29 to 150 years in prison for masterminding a multibillion dollar fraud, US District Judge Denny Chin told prosecutors to alert him by Sept. 28 whether restitution was practicable and the amount of victim losses.
Also yesterday, the California attorney general sued a Beverly Hills money manager accused of funneling hundreds of millions of dollars in investments to Madoff. The lawsuit filed in Los Angeles County Superior Court accuses Stanley Chais of securities fraud, unfair competition, and other state business violations. It seeks at least $25 million in fines, plus restitution, and a court injunction barring Chais from future operations.
Chais, 83, already faced several investor lawsuits, and in June, the Securities and Exchange Commission filed civil fraud charges against him in New York.
His New York attorney, Eugene Licker, said he had not seen the latest lawsuit and could not immediately comment. However, he previously described Chais as a victim who had no knowledge of Madoff’s scheme.
Chais now lives in New York, where he is undergoing treatment for myelodysplasia, a blood disorder.
© Copyright 2009 Globe Newspaper Company.
