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Salem businessman to battle Madoff suit

By D.C. Denison
Globe Staff / December 30, 2010

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Robert Lappin, a Salem businessman and philanthropist who lost millions of dollars that he entrusted to convicted swindler Bernard Madoff, said yesterday that he intends to fight a lawsuit seeking $1.8 million from one of his funds.

The complaint was filed in federal court this month by Irving Picard, the trustee charged with recouping assets for victims. The complaint says that the Shetland Fund Limited Partnership, which was headed by Lappin, was a so-called net winner, meaning that it withdrew more money from its account with Madoff over the years than it deposited.

Picard is seeking the $1.8 million as part of a massive clawback effort to recoup funds from investors who made false profits from the Madoff scheme. The funds will be distributed to the thousands of investors defrauded by Madoff.

Madoff is serving a 150-year federal prison sentence.

Picard filed the complaint despite the fact that Lappin has lost considerable sums in other funds that he invested with Madoff. A pension fund for employees of Lappin’s North Shore office park lost $5 million, which he later personally reimbursed.

The Shetland Fund Limited Partnership, focus of the suit against Lappin, was wiped out and has been dissolved, he said yesterday.

Lappin, 88, said that he has written a letter to Picard contending that the fund “was a net loser, not a net winner.’’ Picard did not respond to a request for comment yesterday.

Lappin said that because of his investments with Madoff, his personal fortune has been reduced from $20 million to “around $2 million,’’ so the lawsuit seeking a $1.8 million would “basically wipe me out.’’

D.C. Denison can be reached at denison@globe.com.

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