Published: Monday, 26 Oct 2009 | 3:31 AM ET

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Palm Beach billionaire and philanthropist Jeffry Picower, described as the biggest beneficiary of Bernard Madoff's fraud, died on Sunday after he was found lying at the bottom of the pool at his home, police said.

Police were investigating the death of the 67-year-old investor as a drowning, local media reported.

Picower was pulled unconscious from the pool of his multimillion-dollar oceanside home, called Casa del Sud, by his wife and a housekeeper. He was later pronounced dead, the Palm Beach Post reported quoting police and Fire Rescue officials.

Picower and his wife, Barbara, were friends of Wall Street financier Madoff, who is serving a 150-year sentence after pleading guilty to running a $65 billion Ponzi scheme.

The trustee handling the Madoff fraud case, Irving Picard, said in court documents filed in U.S. Bankruptcy Court in New York late last month that Picower, newly listed as one of the 400 wealthiest Americans by Forbes magazine, was complicit in the fraud.

Part of Picard's filing said: "Based upon the trustee's investigation to date, Picower was the biggest beneficiary of Madoff's scheme, having withdrawn either directly or through the entities  he controlled more than $7.2 billion of other investors' money."

Picower was being sued for the $7.2 billion, $2 billion more than the trustee in the case demanded in May.

The Palm Beach Post reported he was not breathing when he was pulled from the pool and paramedics worked unsuccessfully for 20 minutes at the scene to try to revive him.

Local WPTV quoted the Palm Beach fire chief as saying he was told by Picower's wife and housekeeper that the elderly investor had gone swimming in the pool of his house and that 15 minutes later they found him lying at the bottom.

Marcia Horowitz, a spokeswoman for the Picowers' attorney William Zabel, said the family was devastated by the loss.

"Mr Picower did have health issues. He suffered from Parkinsons disease and did have heart-related medical issues," she said.

Madoff Fraud Devastated Wealthy Community

Madoff found many investors for his multibillion-dollar Ponzi scheme in the wealthy Palm Beach community where he also had a home, since seized along with other assets.

The collapse of the scheme last December devastated  families and charitable foundations in the sunny beachside playground, one of America's richest towns.

The scandal led to a number of suicides among participating investors. In December, Frenchman Thierry Magon de la Villehuchet, co-founder of money manager Access International, was found dead with his wrists slashed, reportedly distraught over losing up to $1.4 billion in client money to Madoff's fraud.

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In February, a former British soldier, William Foxton, 65, killed himself after losing his life savings in the scheme.

Picower was listed 371st and worth $1 billion on the latest published Forbes list.

He started out as an accountant and lawyer and then made money investing in the medical sector.

He and his wife headed a philanthropy, the Picower Foundation. The foundation closed when the Madoff fraud unraveled last December.

A spokeswoman for Zabel, the Picowers' attorney, has rejected Picard's accusations against Picower as "false and outrageous claims ... based on a misreading of the purported 'facts'."

She said the Picowers initiated discussions to reach a settlement with the trustee, who is winding down Bernard L. Madoff Investment Securities LLC.

Picard, who is leading a global search under the Securities Investor Protection Act to recover money for thousands of defrauded investors, has collected about $1.5 billion, but has sued for some $15 billion.

The case is Irving H. Picard, trustee for the liquidation of Bernard L. Madoff Investment Securities LLC v. Jeffry M. Picower 09-01197 in U.S. Bankruptcy Court for the Southern District of New York (Manhattan).

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