×

Madoff's Sons Deny Role in Fraud, Move to Dismiss Complaint

Family members of admitted fraudster Bernard Madoff have insisted that they, too, are victims of the historic Ponzi scheme, and moved late Monday to dismiss a civil complaint alleging that they helped facilitate the fraud.

Bankruptcy trustee Irving Picard sued the family members in October, seeking nearly $200 million to return to investors. But attorneys for sons Andrew and Mark Madoff, brother Peter Madoff and niece Shana Madoff filed separate motions blasting the Picard complaint as sensationalistic, and asking that it be thrown out.

Attorney for Andrew and Mark Madoff, Martin Flumenbaum, argued in a 57-page filing that the sons are "victims of their father's terrible crimes."

Flumenbaum noted that the sons reported the scam to authorities within hours after their father confessed to them December 10, 2008, and called Picard's complaint "an exercise in gross overreaching" that is "long on rhetoric and short on legal or factual support."

Meanwhile, Peter Madoff's attorney, Charles Spada, said his client is "devastated" by the scandal.

"Peter Madoff is not Bernard Madoff," Spada writes, noting that the arrest of Bernard Madoff "abruptly terminated Peter Madoff's successful career," leaving him "mired in litigation."

Bernie Madoff mugshot
US Department of Justice
Bernie Madoff mugshot

"The Trustee's Complaint is a sensationalistic attempt to lump together members of the Madoff family and create liability by association," the statement continued.

Shana Madoff - Bernard Madoff's niece and Peter Madoff's daughter - served as Compliance Director at the Madoff firm. Her attorneys also moved Monday to dismiss the Picard complaint.

Picard's suit alleged that Madoff's relatives treated his firm as a "family piggy bank." The suit detailed years of what Picard described as fraudulent money transfers, and alleged the family members helped facilitate the Madoff fraud.

The family members are now asking for a hearing in June before U.S. Bankruptcy Juge Burton Lifland on their motion to dismiss the suit.

The complaint is one of several Picard has filed in hopes of recovering some funds for investors. Madoff's wife Ruth Madoff has until May to respond to a separate complaint seeking at least $44.8 million.

Madoff, who is serving a 150-year sentence at a federal prison in North Carolina, has said in court that he lied to his wife, brother and sons about the Ponzi scheme.

Reached after the motions were filed, Picard declined to comment, saying he would respond to the court in due course.