Madoff Turned in by Sons After Confessing $50 Billion Fraud

Bloomberg.com
By David Voreacos and David Glovin
December 12, 2008

Bernard Madoff's sons turned him in to U.S. authorities after he confessed to them that his investment advisory business was “a giant Ponzi scheme” that cost clients $50 billion, a lawyer for the brothers said.

Mark and Andrew Madoff contacted authorities on the evening of December 10 after their father admitted a fraud that led to his arrest yesterday by the FBI in Manhattan, according to a statement today by attorney Martin Flumenbaum, their lawyer. The brothers, who worked for their father, had no prior knowledge of the fraud, Flumenbaum said.

“Mark and Andrew Madoff are not involved in the firm’s asset management business, and neither had any knowledge of the fraud before their father informed them of it on Wednesday,” said the statement by Flumenbaum of Paul, Weiss,Rifkind, Wharton & Garrison in New York.

“They were shocked to learn of his actions and contacted the authorities immediately upon being told that he had been defrauding the firm’s clients,” it said. “The brothers were among the many victims of this scheme and will continue to cooperate fully” with prosecutors at the U.S. Attorney’s Office and regulators at the Securities and Exchange Commission.

Madoff was charged yesterday with securities fraud, and the SEC filed a civil lawsuit against him and his firm. He appeared yesterday in federal court in New York and is free on bail after posting a $10 million bond yesterday secured by his Manhattan apartment and guaranteed by his wife.

The case is U.S. v. Madoff, 08-MAG-02735, U.S. District Court for the Southern District of New York (Manhattan).

[ RGM Short Selling Home page ]