One of Bernie Madoff’s oldest fund raisers, Frank Avellino, has been sued in a Nantucket court for allegedly investing—and, of course, losing—more than $1 million in Madoff’s Ponzi scheme.
It’s the second lawsuit in Nantucket against Avellino, who has a reputation on the New England island as being one of its most charitable residents. It’s hard to find a cause popular on the island that Avellino wasn’t giving to, according to residents. The earlier lawsuit was filed by Avellino’s house-keeper, who claims Avellino invested—and lost—her lifesavings, all of $124,000.
That suit caught our attention because the house cleaner, Nevena Ivanova, was reportedly told all her money was gone on December 1, 10 days before the Madoff scheme was exposed to authorities. It seems to indicate that Avellino had prior knowledge that Madoff’s investment company was on the verge of collapse. We’re not the only ones who think that early knowledge plus Avellino’s long relationship with Madoff probably means he was in on Madoff’s scheme.
Natucket’s Inquirer and Mirror has the details:
John “Jack” Daley and Nancie Taylor, who sold their Cliff Road home to Avellino in
1992 and considered him a friend, have filed suit against Avellino in Nantucket Superior Court, seeking to recover their money that was lost when Madoff’s $1 billion scheme collapsed last December and he was turned in to federal authorities by his sons.
Like Ivanova, Daley and Taylor allege that Avellino encouraged them to invest their money with him through a fictitious entity known as Kenn Jordan Associates, promising returns of 10 to 15 per cent. According to the lawsuit filed Tuesday in Superior Court, the couple received a letter from Avellino on Dec. 31 informing them that “all our assets are held in a securities account with Bernard L. Madoff Investment Securities, LLC, which the SEC has frozen.”
It was the first time Daley and Taylor had any hint that their money was tied up in the widening scandal involving Madoff.
Avellino, you’ll recall, began investing money with Madoff way back in 1962. In the early nineties, he was busted by the SEC, along with his partner Michael Bienes, for running an illegal securities firm that placed investor money with Madoff. It very much appears that this didn’t dissuade the pair from raising money from others to place with the Ponz.