Law Student Suing Peter Madoff Has New Adversary
The Long Island law student who is suing Bernie Madoff's brother over the loss of his trust fund has a new and unlikely adversary: the bankruptcy trustee who is representing Bernie Madoff's creditors.
22-year-old Andrew Samuels sued Peter Madoff last month in New York State Supreme Court, and last week won a modified temporary restraining order freezing most of Madoff's assets. As trustee for Samuels' $478,000 trust fund, Peter Madoff invested the money with his brother. Samuels is seeking to recover the money directly from Peter Madoff, arguing Madoff knew he was putting the money into a Ponzi scheme.
Peter Madoff was Bernie Madoff's Chief Compliance Officer.
But now, in a letter obtained by CNBC, an attorney for bankruptcy trustee Irving Picard warns that if Samuels recovers any money from Peter Madoff, Picard will attempt to recover it for Bernie Madoff's creditors. Samuels' attorney, Steven Schlesinger, calls that an attempt at intimidation by Picard, and warns in his response that he will go to court to block any attempt to seize his client's money.
Schlesinger has argued that Samuels is in a unique position in that he is suing Peter Madoff for breaching his fiduciary duties as a trustee, rather than suing Bernie Madoff for fraud or positioning himself as a creditor of the Madoff firm.
Samuels' grandfather, a close friend of the Madoffs, died in 2003 leaving the trust fund to his grandson and naming Peter Madoff as trustee.
The battle typifies the mad scramble underway for what's left of the Madoff Ponzi scheme. At last report, a little more than $1 billion had been recovered out of an estimated $65 billion believed to have been lost.
Peter Madoff has until early May to respond to Samuels' suit.