A lawyer for Michael Bienes, one of the first men funnel clients’ money to Bernie Madoff, is claiming that Bienes is a victim of Madoff. Mark Raymond says his client has had limited contact with the Ponz over the years. And, perhaps more interestingly, he claims that Bienes had basically fallen out with Frank Avellino, his business partner since the 1960s in raising funds for Madoff.
Raymond says some of the money was solicited, with Avellino and Bienes promising returns of 18 per cent. Other money came in via word of mouth, Raymond said, as customers knew investing with Avellino and Bienes meant you were really investing with Madoff. This came to an end in 1992 when the SEC accused Bienes and Avellino of selling unregistered securities to an unregistered investment advisor.
Raymond says the matter with the SEC was settled in a week and the money, plus interest was returned to investors in the 3,200 accounts Avellino & Bienes managed.
One of those investors, Gerald Blumenthal of Boca Raton, Florida confirms this, telling CNBC the firm returned the money right after it was investigated by the SEC. Blumenthal took the money that was returned and reinvested it with Madoff. He says he has lost those funds, along with an IRA he had invested with the 70 year-old Madoff.
Raymond claims after the SEC action, other than investing his own money with Madoff, Bienes had no business dealings with the man accused of carrying out a $50 billion dollar Ponzi scheme…
Raymond also says Bienes has had limited contact with his former business partner over the years, speaking with Avellino maybe once a year. A lawsuit filed recently suggest Avellino did not break off ties with Madoff. He is currently being sued by woman who cleans his house in Nantucket. In a lawsuit Nevena Ivanova claims she and her husband gave Avellino $200,000 to invest. When Ivanova asked for the money on December 1, Avellino told her the money was gone. That was 10 days before Madoff’s scheme became public.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.