Madoff trustee Irving Picard filed a fiery response to billionaire investor and philanthropist Jeffry Picower’s motion to dismiss the claims brought against him for his alleged knowledge of the scheme.
Picower was Madoff’s “biggest benefactor,” the response says.
Picard raised the stakes from $5 billion to $7.2 billion and holds no punches in addressing Picower’s claim that he could not have known about the fraud because he made too much money from it. Picower fails to address the substantive allegations that he knew or should have known about the scheme and Picower’s arguments are “dubious at best,” the response says.
In his motion to dismiss, Picower stated that the billions he withdrew would have “placed an extraordinary strain on the scheme” and that it would make no sense for Madoff to compensate Picower for making the scheme more difficult.
ProPublica: The trustee notes that Picower’s largest withdrawals were quarterly, allowing Madoff to plan ahead for them. The trustee also adds a new detail to the story. As early as 2003, Madoff was having trouble paying Picower the full amount the investor was demanding every quarter. “[Madoff’s] failure to pay Picower sums that purportedly were in his accounts or otherwise available to him is further evidence that Picower knew or should have known of Madoff’s fraud,” states the brief. “This evidence becomes more compelling given Picower’s apparent lack of complaint about his inability to access billions of dollars reported on his [Madoff] account statements.”
Read the whole report here.
In response to Picard’s latest filing, Picower’s attorney, William Zabel, told ProPublica, “[T]he Trustee continues to make false and outrageous claims about Mr. Picower based on a misreading of the purported “facts.” When the true facts are known, the Court will see that Mr. Picower was deceived by Bernard L. Madoff like the SEC and thousands of other investors, as many as half of whom took out more money than they put in.”
Zabel indicated his client hoped to reach a settlement. A hearing on the motion to dismiss is scheduled for October 27.
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