Fund Chief With Madoff Ties Commits Suicide

The founder of an investment fund that lost $1.4 billion with Bernard Madoff was discovered dead Tuesday after committing suicide at his Madison Avenue office, marking a grim turn in a scandal that has left investors around the world in financial ruin.

Rene-Thierry Magon de la Villehuchet was found sitting at his desk at about 8 a.m. with both wrists slashed, New York Police Department spokesman Paul Browne said. A box cutter was found on the floor along with a bottle of sleeping pills.

De la Villehuchet, 65, was pronounced dead at 8 a.m. local time at a Madison Avenue building in midtown Manhattan, New York City Medical Examiner spokeswoman Ellen Borakove said. He was co-founder of money manager Access International.

Results of an autopsy are not expected to be available until late Wednesday morning. No suicide note was found.

De la Villehuchet, who was described by his attorney as having been distraught recently, had been trying to recover some of the funds lost to Madoff, whom U.S. prosecutors accuse of orchestrating a $50 billion fraud.

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De la Villehuchet was one of several fund managers to be hit hard in Madoff's alleged Ponzi scheme. Investment funds that lost big to Madoff are also facing backlash and investor lawsuits for not protecting their clients from the alleged fraud.

It is not immediately known what kind of scrutiny de la Villehuchet was facing over his Madoff losses through Access International, located a couple of blocks from Rockefeller Center.

But on Monday night, he told cleaning crews in his building that he wanted them out of his office by 7 p.m. because he was going to be working late. Workers returned Tuesday morning and found the door locked. He was discovered dead with a garbage can placed near his body, apparently to catch the blood, NYPD's Browne said.

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De la Villehuchet was a prominent investor who came from a long line of aristocratic Frenchmen, with the Magon part of his name referring to one of France's most powerful families.

His fund enlisted intermediaries with links to the cream of Europe's high society to garner clients. Among them was Philippe Junot, a French businessman and friend who is the former husband of Princess Caroline of Monaco. Among de la Villehuchet's investors was France's second richest family, the Bettencourts.

De la Villehuchet, the former chairman and chief executive of Credit Lyonnais Securities USA, was also known as a keen sailor who regularly participated in regattas and was a member of the New York Yacht Club.

509 Madison Avenue in New York, where Access International Advisors has its offices and where de la Villehuchet was found.

He lived in an affluent suburb in Westchester County with his wife. They have no children. There was no answer Tuesday at the family's two-story house, which has a majestic view of a pond.

"He's irreproachable," said Bill Rapavy, who was Access International's chief operating officer before founding his own firm in 2007.

Access may have lost as much as $1.4 billion to the Madoff scheme. The fund did not immediately return a call seeking comment.

According to a source familiar with the situation, de la Villehuchet was asked by Madoff to set up Access to market the Madoff funds to the Bettencourts—who owe their fortune largely to the L'Oreal cosmetics company—and to their society friends.

Other investors in the fund included a unit of Rothschild and several clients of Swiss bank UBS , according to published reports.

De la Villehuchet also had invested his personal money in the fund.

—Vicky Ward, CNBC contributor, and wire services contributed to this report.  

© 2008 CNBC.com