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Madoff Sons' Wives - Next Target of Trustee

April 5, 2012
Madoff trustee Irving Picard, whose job it is to raise as much of the estimated $20 billion in customer losses as is practicably possible, might decide to pursue claims against the wives of Bernie's sons, a U.S. federal court judge said Wednesday. U.S. Bankruptcy Judge Burton Lifland in Manhattan told trustee Picard he may pursue claims for about $76 million from the two women:  $43 million from Deborah Madoff, former wife of Andrew Madoff, and $33 million from Stephanie Mack, widow of Mark Madoff. To follow through with the pursuit, Mr. Picard simply would add the women as defendants to an earlier complaint against several defendants including Andrew Madoff and the estate of Mark Madoff, who committed suicide in December 2010. These added claims cover alleged unjust enrichment and constructive trust under New York law, according to Judge Lifland's 21-page ruling.  The judge said the trustee could not pursue similar claims against Susan Elkin, Mark Madoff's first wife, because they took place too long ago. However, Judge Lifland told Mr. Picard he may pursue smaller so-called subsequent transfer claims against Deborah Madoff - who began divorce proceedings against Andrew Madoff in 2008 -  and Ms. Elkin, who divorced Mark Madoff in 2000. But, the judge said the trustee may not pursue bankruptcy law claims against Deborah Madoff and Ms. Mack, as the women could reasonably have believed their omission from the original complaint was not a mistake and was part of the trustee's strategy. At the outset, trustee Picard had sought to recover over $255 million from Madoff's family, whom he said used the former Bernard L. Madoff Investment Securities LLC as a family "piggy bank." Trustee spokeswoman Amanda Remus did not immediately respond to a request for comment.  Lawyers for Deborah Madoff, Mack Madoff, Andrew Madoff, and Mark Madoff's estate also did not immediately respond to requests for comment.  Thomas Goldberg, a lawyer for Elkin, declined immediate comment, saying he had not fully reviewed the decision. Picard has said he has recovered $9.1 billion for Madoff victims, whom he estimates lost $20 billion.  Much of the $9.1 billion remains tied up in litigation. The case: Picard v. Madoff et al, U.S. Bankruptcy Court, Southern District of New York, No. 09-ap-01503. [Reuters, 4/4/12]