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At least 1,000 suits to proceed in Madoff case

Mark Madoff killed himself on the two-year anniversary of his father’s arrest in the largest Ponzi scheme ever recorded. Mark Madoff killed himself on the two-year anniversary of his father’s arrest in the largest Ponzi scheme ever recorded.
By Graham Bowley and Peter Lattman
New York Times / December 13, 2010

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NEW YORK — With Saturday’s deadline for filing suit having passed, at least 1,000 civil lawsuits will now go forward to try to recover more than $50 billion for victims of the global Ponzi scheme orchestrated by Bernard Madoff.

David Sheehan, counsel for Irving H. Picard, the trustee charged with recovering assets, said yesterday that he expected hundreds of those suits — many filed against individuals, some of them prominent — to be settled before or soon after they reach court in coming months.

The rest are likely to proceed to trial, he said.

Sheehan said the death on Saturday of Mark Madoff, the older of Bernard Madoff’s two sons, would not affect the complaints against him, his brother, Andrew, and other relatives.

Mark Madoff, 46, was found in his Manhattan apartment, hanging from a dog leash while his 2-year-old son slept in an adjoining room. The medical examiner’s office confirmed the cause of death was hanging, and labeled it a suicide.

As the shock of his death set in, people close to him said he had been increasingly upset in recent weeks by the extensive scrutiny the Ponzi scheme was receiving as the second anniversary of his father’s arrest approached.

He was particularly troubled by lawsuits against him and his family as the bankruptcy trustee approached Saturday’s deadline, and by media speculation about whether he played a role in his father’s fraud and whether he could face criminal charges, they said.

According to two people close to Madoff, he had been particularly anxious about an article due to run in The Wall Street Journal on Saturday.

One of these close friends, who said he had spoken with Madoff frequently over the past two years, talked to him Friday for 10 minutes. There was nothing foreboding about the conversation, this person said. He said Madoff told him The Wall Street Journal was running an article about him the next day, and though he believed it was going to cover old news, he expressed concern and frustration.

This wasn’t unusual, the friend said. Madoff had always been acutely sensitive to media coverage connecting him to his father’s fraud.

The Journal declined to comment.

The lawyer for Bernard Madoff, Ira Lee Sorkin, would not comment yesterday on whether Bernard Madoff, who is serving a 150-year sentence, had been told of his son’s suicide.

Picard on Saturday issued a statement extending sympathy to Madoff’s family, calling his death a “tragic development.’’

Sheehan said that most of the lawsuits had been filed in Bankruptcy Court in the last three weeks and that he was prepared for a barrage of legal challenges trying to stop the complaints.

Picard has recently sued more than a dozen major banks.

There may be yet more lawsuits filed by the trustee, Sheehan said.

The initial two-year deadline for litigation had passed, but the trustee has one more year to trace the money he is trying to recover from the current roster of defendants, and to file complaints against anyone else to whom those funds may have been transferred, he said.

Related

Photos: Selling Madoff

Photos: Selling Madoff

Homes, belongings of convicted swindler sold to recoup funds.