Sign in to wowOwow

Enter the email address that you used when registering at wowOwow.
The password field is case sensitive. Click here if you have forgotten your password.

Please register for wowOwow

Newsletter subscriptions
Sign up to receive wowOwow's weekly newsletter and get our best picks delivered right to your inbox. Our newsletter content is hand-picked by the wowOwow editorial team and provides the top features, news, and commentary from our site. Subscribing to our newsletter is free and safe. We will never share your email or other information with a third-party without your direct consent.
By registering, you indicate that you have read and agree
with our privacy policy and terms of service.
Home › Money

Bernard Madoff Ponzi Scheme | 06/17/2009 9:00 am

Madoff Sons Sued for $1.7 Million, Ex-Employees Claim They Knew About Dad's Scheme

Although there’s no proof yet that Madoff’s sons knew anything, some certainly think they did; Bernie banned from business
By The Staff at wowOwow.com
© AP

It seems Bernard Madoff isn’t the only one in the family under fire.

Two proprietary traders of Bernard L. Madoff Investment Securities LLC, Richard I. Stahl and Reed Abend, have sued Madoff sons Mark and Andrew for $1.7 million, saying they "had long known" their dad’s business was illegal and a scam, reports Dow Jones. We told you yesterday that the latest issue of Vanity Fair asks how the sons couldn’t have known about dad’s dealings, but no far, no charges have been filed against them or mom Ruth. The lawsuits, filed in New York State Supreme Court in Manhattan, claim the Madoff sons helped to "perpetuate their father’s lawless conduct" and his $65 billion Ponzi scheme by making false statements and failing to disclose dad’s dirty deeds, just so they could keep profiting.

"The lawsuit is totally without merit. Andrew and Mark had no knowledge of their father’s fraudulent conduct," said Mark and Andrew’s attorney, Martin Flumenbaum. 

Meanwhile, the Securities and Exchange Commission on Tuesday officially banned Bernie Madoff from the securities business — for life. Took them long enough! The ban is part of a deal between Madoff and the SEC to settle a civil complaint — separate from the criminal complaint over the Ponzi scheme — against the jailed investment adviser without him having to admit any wrongdoing. That has some crying foul.

"You can only mock this," Columbia Law School professor John Coffee told Reuters. "I don’t think the SEC will be able to declare a victory in this case."

Madoff will be sentenced June 29 for his role in the the nation’s biggest investment fraud ever. The 71-year-old could face life in prison.

 

Read more about: Andrew Madoff, Bernard Madoff, Civil Complaint, Criminal Charges, Employees, lawsuit, Madoff Securities, Mark Madoff, News, SEC, Securities and Exchange Commission, Sentencing, U.S.

14 Reader Comments (so far…) Sign In or Register to comment

angelyn palmer
have one of these lawn mowers one opf my sons tought it was so cool to mow the lawn with, but of course that wore off when it became work to mow instead of fun
By angelyn palmer on 06/17/2009 9:13 am
Debbie Torelli
WHAT????
By Debbie Torelli on 06/17/2009 5:17 pm
EKA -
"They Knew About Dad’s Scheme" ya think ????? Proving it will be another matter. Thank you ,Vanity Fair, for the best coverage of this scandal.
By EKA - on 06/17/2009 9:21 am
C Hardy
If the family works together how did they not know?  That is just beyond me…and to think they feel no remorse for what they did to so many people.  That is what gets me…I feel the Madoff family should stand up in front of cameras an apologize and start to pay the money back, they have it, give it up.  When your dead you can’t take it with you, give it back to those who need it now to live.  How do they sleep?  How do they not feel nasty all day?  I just dont get it…who the heck are these people to think what they did was not wrong…
By C Hardy on 06/17/2009 9:50 am
C jay
Just look around you, CH - they’re coming out of the woodwork.
By C jay on 06/20/2009 9:20 pm
Patty E
It’s one of those…."EVERYbody knows…." situations…..but the Madoff family hopes no one can prove who did what……my thoughts wander to how many outside the family are ALSO ‘guilty’ of perpetrating the fraud…..my thinking suggests that there are plenty of people OUTSIDE tha Madoff family that knew about this shennanigan, as well…..ask yourself, how could it have worked for so long without collusion of those outside the family?……..It is MY reasoning, therefore, that all are zipping their mouths to protect ‘the guilty’…..must be some pretty powerful names involved……  
By Patty E on 06/17/2009 10:23 am
Belinda Joy
Of course his family knew what was going on. Let us not forget right after he was arrested the law officials found envelopes of huge amounts of cash in his desk drawer that he was going to mail to his family to hide. If the officials had not intercepted this shipment of money, does anyone really believe his kids and wife would have received the money and turned it in to the authorities? Not bloody likely I say….
By Belinda Joy on 06/17/2009 11:10 am
C jay

and… the SEC is CYAing all the way to their banks. We are not getting 1/10 of this in the news, not 1/10. The ladder of guilt goes right to the top (you know where to find him).

But, once again, the Made Offs are hedging the bet they will not be prosecuted, because no one else has been prosecuted, again, from the top down for 40 years. How many of us reported questions, and losses to the SEC and our state SEC boards? I did - "they are high on our radar" said the Tx securities board right to my face.

Where there is money like that, they is collusion. Many of those investors were also in the "know." Count on it.

 

By C jay on 06/20/2009 9:25 pm
Kristy B

People aren’t that stupid.  Of course, they had something to do with it!

By Kristy B on 06/17/2009 11:26 am
kermie b
I hope this is the first of many lawsuits against members of Madoff’s family. Something tells me 1.7 million dollars is a drop in the bucket to them.
By kermie b on 06/17/2009 1:29 pm
C jay

and, let’s look at all the other brokerage houses, and "personal money managers" carefully. Case in point: I had TIAA CREF and none of my statements added up. Hec, it was an NGO, so I wondered why would they do anything wrong, they don’t have to show a profit, merely serve their mission. NOT. I had a wise investor I know look at my statements and he agreed - they don’t add up.

After a blooming fight, I got my money back, and very soon thereafter, that group lost it’s non-profit status. I would not use them for investing a penny.

By C jay on 06/20/2009 9:29 pm
Laura Ward

When you work for corrupt companies, you always know when there’s something fishy going on. Examples 1) the commercial real estate company who evicted Asians (and kept the assests in the property) as soon as they were legally late but gave their Caucasian tenants a lot more leniency, 2) an oil company who ordered us to use higher priced vendors who were friends of the CEO, 3) the oil company who told us to overprice our product to certain customers.

…and so on, and so on…

One problem is: Who do you report this to? Second problem is: There goes your job.

The Madoff sons should have quit the company if they couldn’t turn their father in. But they knew.

By Laura Ward on 06/17/2009 3:13 pm
Andrea Brandon

I agree, $1.7M seems like a paltry sum. Why gee, the attorney expenses could easily go that high.

No one’s talking because of the fear of implication, I’ll bet.

By Andrea Brandon on 06/17/2009 9:42 pm
canuck canuck
There is no way one man carried this out all by himself. I hope they charge every dang one of them and that the investors manage to get some of their money back. Shame on this family!!!
By canuck canuck on 06/17/2009 11:03 pm