Ira Sorkin’s mum rode Bernie Madoff’s Ponzi scheme up from 2001 until her death in 2007, when she cashed out, Bloomberg says. And the account, opened by Sorkin’s father, may have been compounding fictitiously for years before that.
This makes Sorkin’s mother–and, through inheritance, Sorkin’s two sons–“Madoff winners”: A few of the lucky thousands who reaped huge “investment gains” that were actually just other people’s money.
Lawyers have already jumped all over the possible conflict of interest here, but they’ve mostly got it backwards. The fear is that Sorkin will be so mad at Madoff that he’ll do a lousy job defending him (and that this will later be used as grounds for a Madoff appeal). But this apparent conflict will only come into play if Sorkin is forced to give his mum’s winnings back. In the meantime, people should be more worried about the emotional outrage of having Madoff defended by someone rewarded by his scheme.
The investment, which came to light as part of a list of Madoff clients filed in federal court, was an individual retirement account opened by Sorkin’s father and inherited by his mother in 2001, Sorkin said. When his mother died in 2007, the IRA was cashed out…
“If one of his close family members was the recipient of that money and essentially benefited from that fraud scheme, it’s something an attorney would clearly have to consider,” said Joan Meyer, a former prosecutor who is now a partner at Baker & McKenzie LLP. Sorkin said he didn’t get the money, declining further comment on who did. The Wall Street Journal reported that the account was divided between his sons, Roger and Peter.
Madoff can waive such a conflict to retain Sorkin as his lawyer, Meyer said. On the other hand, defendants who sign such waivers who are later convicted have been known to claim the waiver was obtained without sufficient information or was sought for conflicts that can’t be waived, potentially leading to “a litigation issue in the future,” she said.
Sorkin, 65, declined to say whether Madoff had signed a waiver acknowledging the connection. Sorkin earlier said there could be no conflict because he hadn’t personally invested with Madoff and declined to discuss any other aspect of the IRA.
“It’s not an issue,” the lawyer said in an interview.