An Amended Complaint was filed on Monday in the case against the Madoff family bringing the amount of the lawsuit up to $226.4 million from $198.7 million. Most of the sum reflects salaries and bonuses obtained by Bernard Madoff’s family members during the ponzi scheme. Those being sued are Peter Madoff who invested $32k but withdrew over $16 million, Andrew Madoff and Mark Madoff’s estate who withdrew more than $35 million (Mark’s estate, not him due to his recent suicide) and Shana Madoff (Peter’s daughter) who was a member of the company’s compliance division at Bernard L. Madoff Investment Securities LLC.
Although the family “steadfastly contend their involvement with BLMIS was entirely legitimate…” they appear to have made withdraws of unreasonable sums of money based on their investments. Shana Madoff, who appears to have taken no withdraws herself is being sued for the lowest sum, $12.7 million for being “derelict” in her duties on the securities firm’s legal board.
The legal justification for the suit comes from fraudulent transfers, preferential payments (favoring one creditor over others when making payments just prior to bankruptcy) and turnover of property, which will allow the court to obtain property or cash from the defendants.
Although being in the Madoff situation is a very rare situation, we can all run into issues of fraud and preferential payments. If you are considering bankruptcy in the future, you need to know what sort of transfers you can and cannot do. Contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.