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Madoff kin fighting civil complaints

Associated Press / March 17, 2010

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NEW YORK — Members of Bernard Madoff’s family want civil complaints alleging they were in on the disgraced financier’s massive securities fraud thrown out.

The accusation by a trustee liquidating Madoff’s assets “is a sensationalistic attempt to lump together members of the Madoff family and create liability by association,’’ attorneys for brother Peter Madoff wrote in papers filed late Monday in federal bankruptcy court in Manhattan.

Lawyers for the trustee, Irving Picard, declined to comment.

Madoff, 71, is serving a 150-year prison term after admitting that his investment advisory service at Bernard L. Madoff Investment Securities was a front for a multibillion dollar Ponzi scheme that spanned decades. He never bought any securities, instead using new investments to pay returns to existing clients.

The trustee has alleged it would have been impossible for them not to know about a scheme that enriched the family, and has demanded they return ill-gotten gains to investors.

Madoff, his brother, and sons Mark and Andrew have all insisted the three were purposely left in the dark. While the FBI says its investigation is ongoing, none of the family members have been charged with any crimes.

The motions to dismiss the trustees’ complaints portray the brother and sons — who ran a separate market-making and proprietary-trading business they insist was legitimate — as victims of the scheme.

The court papers credit the sons with contacting “authorities within hours of learning of their father’s betrayal of their trust.’’