March 17th, 2010
03:05 AM ET

Madoff relatives seek to dismiss $199 million lawsuit

Family members of Ponzi schemer Bernard Madoff have filed motions to dismiss a $199 million lawsuit leveled against them last fall.

The three dismissal motions came Monday from four Madoffs: one from Madoff's brother, Peter Madoff; one from his sons Andrew and Mark Madoff; and one from his niece, Shana Madoff.  All four held senior positions at Bernard L. Madoff Investment Securities.

In the court documents, lawyers for the Madoffs say their clients have received undue blame simply because they share a last name with the perpetrator of the largest fraud in Wall Street history.  "Allegations are painted with the broadest of strokes in an effort to sweep anyone with the Madoff name - regardless of fault or actual involvement - within the fraudulent investment advisory business of BLMIS," Shana Madoff's  attorneys wrote.

Similarly, Peter Madoff's lawyers try to distance him from his notorious sibling. "Peter Madoff is not Bernard Madoff," their motion opens.  And Andrew and Mark Madoff's lawyers deny the two were any more aware of their father's long-running fraud than the many other clients he duped.

"They rank among [Bernard's] numerous victims," the lawyers wrote. The sons' lawyers further say that the two were heroes of sorts, promptly blowing the whistle on their father, thus thwarting the loss of even more Madoff client money.  " ... they reported his crimes to the authorities, and thereby prevented
the dissipation of $170 million more in customer funds," the sons' attorneys wrote.

In October 2009, Irving Picard, the court-appointed trustee tasked with liquidating Bernard Madoff's business, sued Peter, Andrew, Mark and Shana Madoff for $199 million.

In the suit, Picard says that the Madoff firm "operated as if it were the family piggy bank."

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Filed under: Justice • U.S.
soundoff (31 Responses)
  1. XINLAW

    I find it hard to believe it would take them this long to 'finally' catch on. I think this act of 'blowing the whistle' was nothing but their way of trying to cover their arse because they knew the crap was about to hit the fan. It would be one thing if it was just an employee, or just a family member, but to be both its idiotic to think they didnt know.

    March 17, 2010 at 7:44 am | Report abuse |
  2. Observer

    Victims, those kids were victims. The kindly brother too. And the Niece married to the SEC guy. What a crock, jail these jerks as soon as possible.

    March 17, 2010 at 7:52 am | Report abuse |
  3. Tony Alexander

    They benefitted from a mistake they should suffer from it as well. I hope the people who got ripped off stand up and yell this at these people.

    March 17, 2010 at 7:53 am | Report abuse |
  4. Dennis in Spring

    BOO HOO!

    Stick it to them!

    They did not know he was doing anything wrong. Give me a break!

    Clean them out and make them start over like all the other people who lost everything!

    Make them an exsample to other cheaters!

    March 17, 2010 at 7:57 am | Report abuse |
  5. NickO

    This family benefited from the act of a criminal. They should have all of their funds that can be tied to either Bernie Madoff or his company taken away. Mr. Madoff funneled money through his company to his family. They should not benefit at all.

    This is just another example of how the rich are trying to live by a different set of rules than the rest of us.

    March 17, 2010 at 7:58 am | Report abuse |
  6. Cest Qui

    It seems to me that the fundamental issue here is the same as that in possession of stolen goods: that the recipient claims to have been unaware that the valuables they received were stolen does not obviate their obligation to return them.

    If my father/brother/uncle burglarized the home of one of the Madoffs and gave me their jewelry, artwork and furniture, would the Madoffs or the law allow me to keep it because I said I didn't know it was stolen?

    Regardless of their statements of ignorance, the money was obtained in an egregiously fraudulent and illegal manner, and the Madoff family has no right to it.

    March 17, 2010 at 8:07 am | Report abuse |
  7. Betadog

    Screw these people! Throw them in jail as well, they helped ruin lives for their own gain and probably still live plenty fat off of that. Don't put them in country club prisons either put them in real ones...

    March 17, 2010 at 9:49 am | Report abuse |
  8. Barbara

    I think it's entirely too early to tell the extent of their knowledge and involvement with the senior Madoff. To dismiss these lawsuits is definitely premature since the investigation is on going. It's really not believable that they had no knowledge of the scam. The fact that his sons blew the whistle means nothing. If Bernie was aware that the jig was about to be up, he may well have instructed his sons to blow the whistle in an effort to make it look like they had no involvement and to spare the whole family being taken down. Or maybe the sons simply did it on their own, thinking that "hey if we blow the whistle on pop, surely they'll think we're innocent." I think they're all as guilty as Madoff and maybe they don't deserve as much jail time, but they definitely should all be prosecuted to the fullest extent of the law. It was truly a conspiracy to defraud.

    March 17, 2010 at 9:50 am | Report abuse |
  9. John

    Precisely because all family member work in this security firm that makes people that this family owned firm is honest and legit. And all 4 should know exactly what going on in the company, because they received bonuses every year, and performance related compensation should have reveal some thing is wrong. The 4 is guilty as charged, since they did not help the clients further loses and to recover their money from madoff. When all the top people are corrupted and work as a team, no auditors in the world can spot the irregularites, since all the books are made up.

    March 17, 2010 at 10:30 am | Report abuse |
  10. Glen

    I believe that any and all of the asset associated with the Madoff's should be given up to the people who lost.

    March 17, 2010 at 10:33 am | Report abuse |
  11. Anonymous

    Where did the money come from? The relatives of Bernie Madoff know. And if they truely want to reclaim their name they should let it go and be thankful they're not in jail because I believe they knew to some degree what was going on. I think the people who lost their retirement are more important than these four people's lavish life styles.

    March 17, 2010 at 10:45 am | Report abuse |
  12. Tony

    I find it hard to believe that these people held senior positions at this firm but had no idea that he was ripping people off. If they didn't know, they should have.

    March 17, 2010 at 10:47 am | Report abuse |
  13. They Knew

    There is NO WAY his son's did not know his business was a scam! Anyone who believes Madoff could single-handedly manage the scope of his scheme is an idiot! PERIOD!!

    March 17, 2010 at 10:59 am | Report abuse |
  14. RL

    All four of these people were in high places in the company and living equally high on the hog. They are as guilty as the senior Madoff and should suffer the consequences of their chosen employment in a corrupt company. These GUTLESS beings now want to keep their illgotten gains at the expense of the very people the swindelled. They also should be in jail.

    March 17, 2010 at 11:00 am | Report abuse |
  15. Vman

    crooks...please tell me these people don't think that John Q america knows whole heartedly that they completely stole millions of dollars too.

    Funny, I bet their own personal life savings weren't in the Madoff investments! Sorta key indicator that the knew and participated in the scheme.

    The should be sitting in the cell next to Berny...

    March 17, 2010 at 11:02 am | Report abuse |
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