Madoff trustee seeks $7b from Fla. investor

By Larry Neumeister
Associated Press / October 2, 2009

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NEW YORK - A trustee recovering Bernard Madoff’s assets for jilted investors has labeled a Florida philanthropist as the biggest beneficiary of the multibillion-dollar fraud and demanded that he return more than $7 billion in bogus profits, his lawyers say.

Trustee Irving Picard rejected Jeffry M. Picower’s claims that he was a victim of the fraud and suffered “devastating’’ and “immeasurable’’ loss.

“Nothing could be further from the truth,’’ lawyers for Picard wrote in papers filed Wednesday in US Bankruptcy Court in Manhattan.

Many investors were damaged by the massive fraud Madoff acknowledged in December to his two sons and then to the FBI, “but Picower was not one of them,’’ the lawyers wrote. “Based upon the trustee’s investigation to date, Picower was instead the biggest beneficiary of Madoff’s scheme, having withdrawn either directly or through the entities he controlled more than $7.2 billion of other investors’ money.’’

According to the lawyers, Picower’s accounts were “riddled with blatant and obvious fraud,’’ and he should have recognized that because he was a sophisticated investor.

They said the trading patterns were so “inconsistent with normal trading activity as to compel the conclusion that Picower had to have known that improper trading activity was occurring.’’

Picower has asked that the lawsuit be dismissed, saying it is unsupported by facts. A lawyer for Picower did not immediately return a phone message seeking comment.

Madoff is serving a 150-year prison sentence.