Madoffs' gravy drain; Bernie's family members lose access to assets

Feds probing Peter Madoff - NYP, 2010 January 28

Peter Madoff, brother of imprisoned con artist Bernard Madoff, is the subject of a US criminal investigation, his lawyer said in a civil lawsuit over losses by the charitable foundation of US Senator Frank Lautenberg.
Bernard Madoff is serving 150 years in prison for running the largest Ponzi scheme in history.
His brother, who was chief compliance officer at Bernard L. Madoff Investment Securities LLC, has not been criminally charged by the US Attorney's Office in New York.
That could change, his lawyer said in court papers filed on Tuesday in the Lautenberg, a New Jersey Democrat, case.
"The USAO has informed us that Peter Madoff is a 'subject' of its criminal investigation," Madoff attorney Charles Spada wrote to US Magistrate Judge Madeline Cox Arleo in federal court in Newark.
The Lautenberg foundation and two of his children sued Peter Madoff, claiming he hid or disregarded the fraud.
Foundation lawyer Ronald Riccio on Nov. 12 deposed Madoff, who invoked his constitutional right against self-incrimination more than 250 times.
Spada cited the criminal probe and a civil lawsuit by bankruptcy trustee Irving Picard, who alleges that Peter Madoff and three other family members who worked at the firm spent $198.7 million of victims' money.

Madoff Aide DiPascali Surrenders New Jersey House, Assets - BL, 2010 February 02, by David Glovin

Frank DiPascali, a key lieutenant to convicted con man Bernard Madoff, and his wife Joanne agreed to surrender their New Jersey home and all its furnishings, according to a court filing.
The DiPascalis had until yesterday to vacate the house in Bridgewater, New Jersey, according to a stipulation and order of sale that was filed in Manhattan federal court. DiPascali is being held in federal prison after pleading guilty in the largest-ever U.S. Ponzi scheme.
DiPascali agreed to forfeit all furniture, televisions, the home gym, home theater equipment, pool equipment, snow blowers, paintings, a blue and white Yamaha motorcycle, and other assets, according to the filing. The DiPascalis also agreed to remove all animals, “including any dead fish,” according to the filing, which was made public yesterday.
DiPascali, the former chief financial officer in Madoff’s investment advisory business, was denied bail on Aug. 11 after pleading guilty to 10 felony counts. He has been cooperating with the U.S. probe of Madoff’s Ponzi scheme.
DiPascali’s lawyer, Marc Mukasey, didn’t immediately return a call. The forfeiture order was signed by U.S. District Judge Richard Sullivan on Jan. 29. Proceeds of the sale will be used to repay Madoff investors.
Three Homes
Sullivan on Oct. 28 refused to release DiPascali from prison because he wanted more information about his assistance to prosecutors. The judge also wanted more details about the people who would guarantee a proposed $10 million bond for DiPascali. Part of DiPascali’s proposed bond was to be three family homes with total equity of about $600,000. .....

Madoff case is tossed (Cohmad) - NYP, 2010 February 03, by Kaja Whitehouse

Uncle Sam's hot pursuit of Bernie Madoff's associates hit a roadblock yesterday when a federal judge dismissed civil fraud charges against the top officers of Cohmad Securities, a major promoter and moneymaker for the Ponzi king.
"One who conducts normal business activities while ignorant that those activities are furthering a fraud is not liable for securities fraud," US District Court Judge Louis Stanton wrote in a motion dismissing the Securities and Exchange Commission's case against Robert Jaffe, a Cohmad vice president.
The judge also tossed the SEC's civil fraud charges against Cohmad's co-founder Maurice "Sonny" Cohn and his daughter, former Cohmad COO Marcia Cohn.
Stanton said the Wall Street watchdog didn't provide enough evidence that Cohmad, which helped market Madoff's fund and shared offices with his firm, knew about his $65 billion fraud.
He gave the SEC 30 days to amend its case.
"We are reviewing the order and will proceed accordingly," an SEC spokesman told The Post.
Meanwhile, a few blocks uptown, Madoff victims packed into a bankruptcy courtroom to wait for a federal judge to decide which investors deserve a cut of the money that has been recovered.
Judge Burton Lifland held off on a final decision, calling the issue "very complex." .....

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