Billions 'withdrawn from Madoff accounts before arrest'

15 May 2009

Approximately $12 billion was withdrawn from accounts belonging to Bernard Madoff's investment firm prior to his arrest for running a $65 billion Ponzi scheme, according to reports.

Sources told the New York Times that around half the money was pulled out in the three months leading up to the disgraced broker's arrest in December 2008.

The newspaper said the figures will offer "a bit of hope" to investors burned by the scam, as under US law the trustee in charge of liquidating Bernard L Madoff Investment Securities can sue those who withdrew the cash.

Indeed, court-appointed trustee Irving Picard has already filed two lawsuits seeking the recovery of $6.1 billion estimated to have been withdrawn from Mr Madoff's firm over the past ten years.

One of those suits was filed against philanthropic organization the Picower Foundation, its two founders and a number of other defendants.

In his complaint, Mr Picard contests that Barbara and Jeffry Picower should have been aware they were profiting from fraud because of the "implausibly" high returns they received from Mr Madoff.

The couple's lawyer said they had not been aware of his wrongdoing and played no role in the fraud, Newsday reported.

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