Fund manager Merkin charged in Madoff fraud

Over the years, Merkin collected $470 million in fees and performance bonuses from his clients.

April 7, 2009 07:11
1 minute read.


Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief


New York Attorney General Andrew Cuomo filed civil-fraud charges Monday against a hedge fund manager who funneled $2.4 billion to Wall Street swindler Bernard Madoff without telling clients where their money was going. The complaint accuses J. Ezra Merkin, the former chairman of GMAC Financial Services, of concealing his links to Madoff and lying to investors about what he was doing with their money, telling most he was personally investing their cash in things like distressed debt. Over the years, Merkin collected $470 million in fees and performance bonuses from his clients, the suit said. Many of those customers, which included several large charities and colleges, had no idea where their money really was until December, when Madoff was arrested. "Merkin duped individual investors, nonprofits and charities into believing he was responsibly managing their investments, when in actuality he was dumping them into history's largest Ponzi scheme," Cuomo said in a statement. The complaint also accused Merkin of mingling his personal funds with the accounts of his management company, Gabriel Capital Group, and using some of the company's funds for personal purchases, including $91m. worth of artwork for his apartment. In the past, Merkin has said through his attorney that he had no idea Madoff was engaged in a fraud and was personally among the largest victims of his crime. One of Merkin's funds, Ascot Partners, sunk nearly every penny of its more than $1.7 billion in assets into Madoff's scheme. Cuomo's suit, filed in a state court in Manhattan, demands that Merkin repay all of the fees he collected from his clients over the years, plus damages.

Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection