Trustee Irving Picard and his chief lawyer David Sheehan told CBS television’s 60 Minutes program that Madoff relatives and many so-called victims profited massively from the fraud.
Madoff’s immediate family used the fraudulent investment firm “like a personal piggy bank,” Sheehan said, while major investors earned billions of dollars – possibly in full knowledge that it was a scam.
“We’ve found that there have been quite a few people who have gotten out more than they put in,” Picard said, adding that Madoff’s sons Mark and Andrew withdrew $35 million from the accounts with little or no investment.
The allegations are behind a legal onslaught stretching far beyond Madoff, who is serving the first months of a 150-year prison sentence.
Lawsuits are expected to be filed by the trustee this week against Mark and Andrew Madoff, Bernard Madoff’s brother Peter and his niece Shana.
Family claim ‘no knowledge’ of scam
All four held executive positions with the firm and should have known about the multibillion dollar, worldwide 20-year long Ponzi scheme, Picard and Sheehan said.
All of the family members have said in previous statements that they had no knowledge of Madoff’s crimes.
Picard is charged with finding where Madoff’s billions vanished so that genuine victims – some left penniless after entrusting everything to the fraudster – can be compensated.
Asked by 60 Minutes whether investigators were working under the assumption that there was money still hidden, Sheehan said: “Yes, we are” and Picard said, “We’d assume it’s millions and millions of dollars.”
Just before his arrest and the collapse of his pyramid scheme in December last year, Madoff sent clients a statement claiming his fund was worth about US$64.8 billion.
Picard and Sheehan, who rarely talk directly to the media, estimate the scheme in reality contained US$36 billion. They say half of this was disbursed before the collapse, while the other US$18 billion disappeared.
So far, Picard has recovered just US$1.5 billion dollars, including revenues from easy targets such as Madoff’s luxury residences in Manhattan, Long Island and Florida.