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Andrew Madoff seeks to block new lawsuit over father's fraud
August 13, 2014 / 5:14 PM / in 3 years

Andrew Madoff seeks to block new lawsuit over father's fraud

NEW YORK, Aug 13 (Reuters) - Bernard Madoff’s surviving son and the estate of his other son asked a U.S. judge to stop the trustee seeking money for the swindler’s victims from adding claims accusing the brothers of aiding and profiting illegally from their father’s Ponzi scheme.

The trustee Irving Picard contended last month that Andrew and Mark Madoff obstructed a 2005 U.S. Securities and Exchange Commission probe by deleting emails that linked them to fraud at Bernard L. Madoff Investment Securities LLC, and took out sham loans to buy pricey Manhattan apartments.

In a Tuesday filing with the U.S. Bankruptcy Court in Manhattan, defense lawyers called it “simply too late” for Picard to amend for a third time his 2009 lawsuit, and seek $153.3 million from Andrew Madoff, Mark Madoff’s estate and Mark’s widow Stephanie Mack.

They also said Picard does not deserve “another bite at the apple” after the U.K. High Court of Justice in a related case last October said neither son “knew of, or suspected” fraud.

That case had been brought by a liquidator for an affiliate of Madoff’s firm, Madoff Securities International Ltd.

“This court should not countenance the trustee’s belated efforts to reinvent his pleading - especially after the trustee lost on this very theory after a full trial in the U.K.,” the defense lawyers wrote.

Mark Madoff committed suicide in 2010.

Amanda Remus, a spokeswoman for Picard, called the U.K. case “a narrow action” addressing director liability for specific transactions set up by Bernard Madoff.

She said the U.S. case is “completely different,” in that it concerns “a history of fictitious trading and sham loans” and arises from Picard’s fiduciary responsibility to former Madoff customers.

Picard has recovered $9.83 billion for Madoff customers who lost roughly $17.5 billion of principal. Madoff, 76, is serving a 150-year prison term.

The case is Picard v. Estate of Mark D. Madoff et al, U.S. Bankruptcy Court, Southern District of New York, No. 09-ap-01503. (Reporting by Jonathan Stempel in New York; Editing by Tom Brown)

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