Irving Picard, the trustee charged with recovering money for the victims of the Bernard Madoff [JURIST news archive] scandal, has filed close to 60 lawsuits in the past three weeks attempting to recover more than $40 billion from numerous banks, hedge funds and individuals. The influx of litigation [FT report] coincided with the Saturday deadline for seeking compensation. Picard has spent two years investigating, and the various resulting lawsuits have culminated in more than 1,100 subpoenas. The suits implicate institutions such as HSBC, JPMorgan, UBS and Citigroup [corporate websites], either for enabling the Ponzi scheme or their failure to recognize it. UniCredit [corporate website] and Sonja Kohn face the largest lawsuits, and are accused of participating in the scheme. Although Picard's deadline has passed, the US attorney in Manhattan Preet Bharara still has three more years to file criminal charges or a civil forfeiture claim. The institutions and individuals sued by Picard continue to deny the allegations.
Last November, former outside accountant for Madoff, David Friehling [case materials], pleaded guilty [plea agreement, PDF; JURIST report] to fraud charges in the US District Court for the Southern District of New York [official website]. Despite his guilty plea, Friehling did not admit knowledge of Madoff's Ponzi scheme. Friehling, who was charged [complaint, PDF; JURIST report] in March, pleaded guilty on nine counts, including securities fraud, investment adviser fraud, making false filings with the Securities and Exchange Commission (SEC) [official website] and obstructing or impeding the enforcement of internal revenue laws. Friehling also agreed to forfeit $3,183,000 in addition to other property obtained through his services to Madoff and promised to cooperate in the government's investigation surrounding the Madoff scandal. Also last year, Madoff's former financial chief Frank DiPascali pleaded guilty [JURIST report] for his role in Madoff's scheme. In June 2009, Madoff was sentenced to 150 years in prison [JURIST report]. Madoff pleaded guilty to 11 charges of fraud in March 2009 after agreeing to a partial judgment from the SEC [JURIST reports] for civil charges stemming from his role in defrauding investors.