Madoff relatives agree to asset freeze

Family members: Consent order not admission of claims of court-appointed trustee.

February 6, 2010 07:46
2 minute read.
Disgraced financier Bernard Madoff.

Disgraced financier Bernard Madoff.. (photo credit: AP)


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Bernard Madoff's brother, sons and a niece, accused in a lawsuit of using the family finance business like a "piggy bank," have agreed to an asset freeze, according to a document filed in court Friday.

The deal with court-appointed trustee Irving Picard was described in a document filed in US Bankruptcy Court in Manhattan.

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Picard sued the family members in November seeking nearly $200 million that he said had enabled the family members to live lavishly at the expense of Madoff investors.

The asset freeze affects Madoff's brother, Peter, his sons, Mark and Andrew, and a niece, Shana Madoff. The consent order requires them to seek permission from Picard to spend more than $1,000 unless the expense results from a list of exemptions such as legal or medical fees. It also requires them to provide a monthly listing of all expenses.

Picard has accused the family members of using Madoff's company "as if it were the family piggy bank." He said they frequently held themselves out to be business and securities regulatory compliance managers and principals at the company.

"Yet the family members were completely derelict in these duties and responsibilities," the lawsuit brought by Picard said. "Simply put, if the family members had been doing their jobs — honestly and faithfully — the Madoff pyramid scheme might never have succeeded, or continued for so long."

In the court papers filed Friday, the family members said they did not want the consent order to be interpreted as an admission of any of the claims made by Picard.


Martin Flumenbaum, an attorney representing Mark and Andrew Madoff, has said the lawsuit's claims are baseless and that the brothers had no prior knowledge of their father's crimes.

Bernard Madoff revealed his fraud to his sons in December 2008 and he was arrested the following day after they reported it to authorities. He was sentenced to 150 years in prison after admitting he caused thousands of investors to lose billions of dollars through his fraud.

"By immediately turning him in, the brothers saved the victims of the fraud more than $170 million that their father was about to distribute," Flumenbaum said.

Bernard Madoff is the only member of the family to have faced criminal charges in the case thus far.

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