Madoff Didn't Just Hurt the Rich

MADOFF UPDATES:
The trustee representing victims of Bernard Madoff’s fraud has filed more than two dozen lawsuits in recent weeks against foundations and charities that invested directly with Madoff and allegedly profited from the scheme. Some charities and individuals that profited—by getting back more than they put in, before the fraud was uncovered—have entered into settlements to avoid lawsuits. The lawsuit, which is typical of the latest claims filed against foundations and nonprofit groups, states that $5.32-million of the $6.68-million withdrawn by the cultural organization from 2002 to 2008 was “fictitious profit” from the Ponzi scheme. Recently, the Jewish women’s charity Hadassah announced that it had struck an agreement to give back $45-million, slightly less than half of its profit from investing with Madoff. Also, Carl Shapiro, a Boston investor and philanthropist and close friend of Bernard Madoff’s, agreed to return $625-million to the trustee. The trustee, Irving Picard, had maintained that Mr. Shapiro, an early investor with Madoff, withdrew more than $1-billion in the six years preceding the exposure of the fraud. Tax forms for the Carl and Ruth Shapiro Foundation listed assets of $345-million in 2007 but just $112-million at year-end 2008.
Foundations established by Bernard Madoff’s sons were also among those that were targets in the latest round of clawback suits. On December 8, the trustee sued the Mark and Stephanie Madoff Foundation and the Deborah and Andrew Madoff Foundation for $2-million each to recover transfers that were made to the foundation from Bernard Madoff accounts. “This action is brought to recover the fictitious profit amount so that this customer property can be equitably distributed among all of the victims.” (Chronicle of Philanthropy) Mark Madoff was found dead as a result of an apparent suicide on December 11, the second anniversary of his father’s arrest. (NY Post)
The trustee recovering money for investors who lost billions of dollars in jailed financier Bernard Madoff's fraud on Friday filed civil racketeering charges against an Austrian banker and 55 other defendants, demanding they give up nearly $20 billion and accusing the banker of being Madoff's "criminal soul mate." Court-appointed trustee Irving Picard used tough language to portray a 23-year relationship between banker Sonja Kohn and Madoff, saying she "masterminded a vast illegal scheme" as she and others engaged in money laundering, mail and wire fraud, and financial institution fraud in support of the Madoff's scheme. He also accused her of accepting at least $62 million in secret kickbacks from Madoff for soliciting investors for the fraud. (AP)