Skip To Content

Support the Forward

Funded by readers like you DonateSubscribe
Breaking News

Bernie Madoff Faces Jailhouse Deposition in Ponzi Scheme Clawback Suit

A federal bankruptcy judge has ruled that Bernard Madoff can be questioned by lawyers for some former customers who lost money when the imprisoned swindler’s firm collapsed in December 2008, a Monday court filing shows.

U.S. Bankruptcy Judge Stuart Bernstein in Manhattan authorized a deposition of Madoff at a March 23 hearing, and Monday’s filing proposed a formal order that it be scheduled. A hearing on that request is scheduled for Wednesday.

Questions would be limited to the meaning of more than 91,000 transactions recorded as “profit withdrawal” on the books of the former Bernard L. Madoff Investment Securities LLC, court papers showed.

Some former customers believe that Irving Picard, the court-appointed trustee liquidating Madoff’s firm, has undervalued their claims.

They have argued that only Madoff would know how to properly account for profit withdrawals, and that what he might say could strengthen their hand in litigation.

Many of these customers have challenged Picard’s methods in court, and also pursued litigation targeting alleged “enablers” who aided Madoff’s Ponzi scheme, including lawsuits that seek billions of dollars from the estate of Florida investor Jeffry Picower.

Picard, who has recouped about $11.1 billion for Madoff’s victims over the last seven years, has argued that the competing litigation interferes with his own, and opposed letting Madoff be questioned.

Picower’s widow also opposed a deposition.

But while expressing concern that a deposition “will not be limited” to the profit withdrawal issue, Bernstein said “the information is certainly relevant,” according to a transcript of the March 23 hearing.

Helen Chaitman, a lawyer for former Madoff customers who sought the deposition, declined to comment. A spokeswoman for Picard also declined to comment.

Any deposition transcript would remain confidential for at least 60 days. Madoff, 77, would be deposed at the North Carolina prison where he is serving a 150-year sentence.


Republish This Story

Please read before republishing

We’re happy to make this story available to republish for free, unless it originated with JTA, Haaretz or another publication (as indicated on the article) and as long as you follow our guidelines. You must credit the Forward, retain our pixel and preserve our canonical link in Google search.  See our full guidelines for more information, and this guide for detail about canonical URLs.

To republish, copy the HTML by clicking on the yellow button to the right; it includes our tracking pixel, all paragraph styles and hyperlinks, the author byline and credit to the Forward. It does not include images; to avoid copyright violations, you must add them manually, following our guidelines. Please email us at [email protected], subject line “republish,” with any questions or to let us know what stories you’re picking up.

We don't support Internet Explorer

Please use Chrome, Safari, Firefox, or Edge to view this site.