by Josh Nathan-Kazis
Amid the hailstorm of lawsuits unveiled in the Bernard Madoff case this week are a score of filings seeking to reclaim funds from non-profit organizations and foundations alleged to have profited from their Madoff investments.
Hundreds of these so-called clawback lawsuits have been filed en masse by Madoff trustee Irving Picard in recent days. The trustee and his legal team are apparently aiming to file all suits before the December 11 deadline, which will mark two years since Madoff’s 2008 arrest.
Non-profit targets of the clawback suits include the America-Israel Cultural Foundation, a 70-year-old organization that gives scholarships to Israeli artists. The group was sued on December 2 for over $5 million of what the lawsuit claims are fictitious profits.
Also targeted was the American Committee for Shaare Zedek Medical Center in Jerusalem, which was also sued on December 2 for nearly $7 million in alleged fictitious profits.
Representatives from both organizations were not immediately available for comment.
The charity pegged with the largest claim appears to be an organization called United Congregations Mesorah, which was sued for over $16 million. No information was immediately available about the group.
Other non-profits targeted by clawback suits on December 1 and December 2 include the Joseph Persky Foundation, the Miles and Shirley Fitterman Charitable Foundation, and the Melvin B. Nessel Foundation. In all, over 20 charities and foundations were sued.
None of the foundations and charities sued was alleged to have been aware that Madoff’s operation was fraudulent.
Conspicuously absent from the list was Hadassah. Public statements by the Zionist women’s organization have indicated that it profited from its Madoff investment, placing it at risk of a clawback lawsuit. Queries to Hadassah’s press representatives and to members of Picard’s team regarding the status of Hadassah with regard to the trustee’s investigation have not been answered.
Madoff himself is currently serving a 150-year prison sentence. And though $5.6 billion in claims have been submitted by Madoff customers, Picard had recovered only $1.5 billion as of September 30.
Other targets of Picard’s latest round of clawback suits include American businessman Morris Talansky, known for his involvement as a witness in the Israeli bribery case against then-Prime Minister Ehud Olmert. In that suit, which was filed on December 2, Picard alleges that Talansky, his wife, and a trust they controlled earned $653,342 in fictitious profits.
“Defendants have received $653,342 of other people’s money,” the complaint reads. Picard does not allege that Talansky knew that Madoff’s operation was fraudulent.
In addition to the suits against individual investors, Picard also filed a $6 billion suit against JP Morgan Chase on December 1. And in late November, Picard filed a $2 billion suit against Swiss bank UBS.
This article originally appeared in The Jewish Daily Forward; reprinted with permission.
- HSBC Holdings PLC and a group of feeder funds were sued yesterday for $9 billion.
- Within the past two weeks, twenty-two lawsuits have been filed against relatives of Madoff and his wife.