The court-appointed trustee in the Bernard L. Madoff case, Irving Picard, will file suit this week against Madoff's sons Mark and Andrew, his brother Peter and niece Shana for negligence and breach of fiduciary duty in their roles at the company -- a development that comes as little surprise in the ongoing saga. In early September,
CBS News reported that Picard would seek the return of at least $50 million from the sons and brother, including at least $30 million in loans.
On Sunday, in a
"60 Minutes" interview with correspondent Morley Safer, Picard added, "Whether or not they have a criminal problem, we will pursue them as far as we can pursue them. And if that leads to bankrupting them, then that's what will happen."
"I believe that they knew," said Picard's chief counsel David Sheehan, who also participated in the interview, and
"the reason that I believe that is because they were officers of these companies and directors in certain instances and also compliance officers in a highly regulated environment. So clearly they would have to known what's going on given their personal transactions, the longevity of what was happening and their responsibilities and officers of the company." OK, for one, the financial industry was only in theory highly regulated, but it definitely wasn't effectively regulated. If Madoff's family is ever criminally charged and found guilty for participating in the Ponzi scheme, it will be interesting to see the Securities and Exchange Commission is vindicated, if only a little, for its failure to catch the fraud. It's been difficult for many of us to grasp how one person could elude an entire agency.
The brothers have denied any wrongdoing.
Other interesting tidbits from the interview, which can be viewed below, include:
- Every time Ruth Madoff spends more than $100, she has to report it to the trustee at the end of the month. She is living "very modestly," Picard said.
- Quite a few people got out more than they put into the scheme. But the small-time winners are not Picard's priority right now, though he will eventually seek clawbacks.
- Asked how much real money went into the whole scheme, Sheehan told
Safer, "I'd say about $36 billion. And about 18 of it went out before
the collapse. And 18 of it is just missing. And that $18 billion is
what we're trying to get back." Sheehan and Picard are operating under the belief that there are still millions and millions stashed somewhere -- and they are determined to find it.
- Sara Behunek
Read the transcript of the interview hereRead DealBook's coverage of the show
