A court document suggests a former associate of Ponzi scheme king Bernard Madoff may not have known all the money was lost before Madoff confessed to authorities.
In an amended complaint to her earlier suit against Frank and Nancy Avellino, Nevena Ivanova claims Frank Avellino told on her Dec. 14, 2008, the money she had given him to invest was gone. An earlier complaint alleged Avellino told Nevena her money was gone on Dec. 1, ten days before the 70-year-old Madoff confessed to running a $50 billion Ponzi scheme. The amended complaint was filed Feb. 27 in Massachusetts Superior Court.
According to the complaint, Nevena, the Avellino's housekeeper for their Nantucket home, is suing the couple to recover the $200,000 she gave Avellino to invest back in September of 2006, plus damages, interest and attorney fees.
Bulgarian immigrants, Nevena and her husband gave Avellino their money to manage at his suggestion. In July of 2008, Nevena asked the money be returned, she alleges Avellino told her she could only access it at the end of the year, but in December he told her the money was gone.
Nevena alleges the Avellinos used her money for their own benefit, or commingled her money with their fund. Avellino's lawyer Gary Woodfield declined to say in an email how his client intends to respond to these charges.
While the amended complaint does not specifically mention Madoff, Avellino has long standing ties with the former financier. Avellino and his former partner Michael Bienes ran an accounting firm that they bought from Madoff's father-in-law back in 1986. In 1992, the SEC charged them with selling unregistered securities to 3,200 investors, and funneling the money to a single, unidentified money manager who turned out to be Bernie Madoff.
Avellino and Bienes settled the suit and returned the money to their investors. Avellino and Bienes were represented by Ike Sorkin, who currently represents Madoff. The SEC never pursued any action against Madoff.
Avellino and Bienes dissolved their accounting firm soon after. Both men claim to have invested, and lost their own monies with Madoff.