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Trustee files against Madoff's money manager
By Tom Hays |
May 4, 2009, Monday
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Print Edition
Print Edition
AS the first speed dial entry at Bernard Madoff's investment firm, longtime money manager and close friend Stanley Chais must have known about the disgraced financier's multibillion-dollar Ponzi scheme, a complaint filed in a United States Bankruptcy Court claims.
But Chais has insisted he was a victim of Madoff. The swindle, he said, wiped out the Chais Family Foundation, which made millions of dollars in annual contributions to various Jewish charges.
In a complaint filed on Friday in a Manhattan court, court-appointed trustee Irving Picard alleged that Chais should be forced to forfeit the more than US$1 billion he earned to help pay claims from thousands of burned investors.
The complaint alleges that his family's accounts earned wildly inflated returns - between 40 percent and 300 percent - since 1995 through Madoff. The trustee says that the money was never actually invested in the market and that the returns came from the pockets of more recent investors.
A lawyer for Chais said on Friday that he hadn't seen the complaint. He reiterated the claim the Chais family had been burned by Madoff, too.
"To the extent that the Trustee has alleged that Mr Chais and his family received any kind of preferential or beneficial treatment from Madoff, it is important to understand that Mr Chais and his family have suffered astounding and ruinous losses from the Madoff scheme," the attorney, Eugene Licker, said in a statement.
Madoff, 70, pleaded guilty in March to charges that his secretive investment advisory operation was a multibillion-dollar fraud. The former Nasdaq chairman faces up to 150 years in prison.
Accounts managed by Chais got "unrealistically high and consistent annual returns of between 20 and 24 percent," the complaint said.
But Chais has insisted he was a victim of Madoff. The swindle, he said, wiped out the Chais Family Foundation, which made millions of dollars in annual contributions to various Jewish charges.
In a complaint filed on Friday in a Manhattan court, court-appointed trustee Irving Picard alleged that Chais should be forced to forfeit the more than US$1 billion he earned to help pay claims from thousands of burned investors.
The complaint alleges that his family's accounts earned wildly inflated returns - between 40 percent and 300 percent - since 1995 through Madoff. The trustee says that the money was never actually invested in the market and that the returns came from the pockets of more recent investors.
A lawyer for Chais said on Friday that he hadn't seen the complaint. He reiterated the claim the Chais family had been burned by Madoff, too.
"To the extent that the Trustee has alleged that Mr Chais and his family received any kind of preferential or beneficial treatment from Madoff, it is important to understand that Mr Chais and his family have suffered astounding and ruinous losses from the Madoff scheme," the attorney, Eugene Licker, said in a statement.
Madoff, 70, pleaded guilty in March to charges that his secretive investment advisory operation was a multibillion-dollar fraud. The former Nasdaq chairman faces up to 150 years in prison.
Accounts managed by Chais got "unrealistically high and consistent annual returns of between 20 and 24 percent," the complaint said.
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