Madoff Trustee Sues Israeli Schools, Hospitals for $95 Million
Bernie Madoff Image by Getty Images
Irving Picard, the trustee appointed to liquidate the assets of convicted Ponzi schemer Bernard Madoff and return money to his victims, has filed a $95 million lawsuit against some of Israel’s largest educational and medical institutions.-
Among the defendants in the suit filed Wednesday in Tel Aviv District Court are Hebrew University of Jerusalem, the Weizmann Institute, the Technion-Israel Institute of Technology and Sheba Medical Center, the Israeli business daily Globes reported.
Picard’s suit, which was filed through an Israeli law firm, alleges that while the institutions unknowingly benefited from stolen money gained through their investments in an Israeli foundation, the Yeshaya Horowitz Association, they have subsequently refused to return it to the victims.
In a 2010 New York suit that is still in litigation, Picard alleged that the Yeshaya Horowitz Association and others knew at the time that Madoff’s New York investment firm was perpetrating a fraud, according to Globes.
Picard’s Tel Aviv suit says the funds received by the Israeli institutions through Yeshaya Horowitz were wrongly classified as donations and grants and were in fact tainted money that was being laundered.
Globes quoted Picard’s lawsuit as saying: “This account, which was part of the Ponzi scheme operated by [Madoff], performed no securities transactions and never generated profits for the approximately $3 million initially deposited upon opening the account. Nevertheless, Yeshaya withdrew approximately $126.5 million to its bank account, distributing it to various institutes in Israel, including the Defendants. The approximately $123 million withdrawn from [Madoff’s company], used to finance Yeshaya activities and donations, were thus stolen from defrauded [Madoff] customers and unlawfully transferred to Yeshaya.”
The lawsuit adds, “While many lost everything and were left penniless in their old age, others, including respected and leading research and study institutions in Israel, illegally received substantial funds.”
Picard’s suit, according to Globes, “relies on unjust enrichment law, which states that a person or company who has received a stolen item in good faith must restore it to its legal owner when the source of the stolen item is revealed.”
Jonathan Agmon, one of Picard’s attorneys, said, “Three years ago, the Hadassah Women’s Zionist Organization (through its organization in the U.S.) returned millions of dollars received from [Madoff], a portion of which came through Yeshaya, upon discovering that the money was stolen from defrauded [Madoff] customers. The defendants must follow suit and return the stolen money that they received. By refusing to take the moral and respectable path, the respondents associate themselves with the thief – Madoff – and not the victims. Returning the stolen money is the right thing to do.”
In a statement on behalf of the defendants, the Association of University Heads of Israel said: “The money involved was legally donated to universities, and has already been used for research and academic needs. The universities do not have, and did not have, any information about how the Horowitz Association made its investments, and any demand for the restoration of the money donated to them is groundless.”
Madoff, 77, is serving a 150-year prison sentence in a federal prison in North Carolina.
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