A Willingness to Cooperate With Investigators. In response to a recent lawsuit filed in connection with the ongoing and massive Bernard Madoff Ponzi Scheme scandal, philanthropist and investment advisor Stanley Chais has indicated a willingness to cooperate with investigators. Bloomberg.com reported that Chais’s lawyer said he would assist in the event a criminal probe is […]
A Willingness to Cooperate With Investigators. In response to a recent lawsuit filed in connection with the ongoing and massive Bernard Madoff Ponzi Scheme scandal, philanthropist and investment advisor Stanley Chais has indicated a willingness to cooperate with investigators. Bloomberg.com reported that Chais’s lawyer said he would assist in the event a criminal probe is initiated concerning his investments with the disgraced financier.
The Madoff Ponzi scandal has made history as being the largest such fraud scheme of its kind. Madoff pleaded guilty to 11 fraud counts on March 12. The former chairman of the NASDAQ stock exchange ran an investment advisory business for decades that was, in fact, a Ponzi scheme. Last November, Madoff told his investors that his fund held more than $65 billion, but in reality, he only had a fraction of that amount. Madoff faces a potential 150 years in prison and continues to refuse to cooperate with authorities.
Recently, Irving Picard, the trustee working to recover Madoff’s assets, filed a lawsuit for more than $1 billion over allegations that prominent money manager, Chais—and his family—knew they were involved in a Ponzi scheme and, worse, profited from the scheme for three decades, said USA Today in an earlier report. Chais and his family, “knew or should have known” Madoff was running a Ponzi scheme,” reported USA Today, citing legal documents. The case alleges that Chais and his family were what USA Today described as “prime beneficiaries” in Madoff’s plot for over 30 years and that they should return the fraudulently-obtained money for future distribution to Madoff’s scammed victims.
Chais is one of eight Madoff investors being looked at by prosecutors, said Bloomberg.com, citing the Wall Street Journal. According to Chais’ attorney, the investor, “had absolutely no knowledge of the Madoff Ponzi scheme as evidenced by the staggering personal losses” he, his family, and his foundation endured, quoted Bloomberg.com.
Picard—who represents the Securities Investor Protection Corporation—is seeking the money from Chais and a number of family trusts in the lawsuit, saying, via a statement issued on his behalf that the funds are “what was, in fact, other investors’ money,” quoted USA Today previously. The action against Chais is the first instance of Picard accusing an alleged Madoff victim of benefiting from the Ponzi scam. Picard also sent a number of so-called “clawback” letters to corporations and individual investors seeking over $735 million in false profits that represent stolen property, explained Newsday previously. The letters were sent to investors who withdrew in excess of original investments with Madoff.
According to Picard’s complaint, Chais received “implausibly high” returns and should have been aware he was involved in a fraud, reported Bloomberg.com. The complaint also stated that Chais representatives asked for fictitious losses.
Earlier this month, USA Today, said that according to the complaint, “Either an utter lack of volatility over twelve years or implausibly high rates of return over the same period suggests misconduct…. That the same investment manager purported to accomplish both at the same time should have removed all doubt,” quoted USA Today.
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