Man who made billions off Madoff scheme wills fortune to charity
Legal wrangling over how much of the money actually belongs to cheated victims delays the gift.
By The Associated Press Tags: Israel newsA man who made billions of dollars off Bernard Madoff's pyramid scheme signed a will leaving the bulk of his fortune to charity, but the gift's ultimate size may depend on legal wrangling over how much of the money rightfully belongs to cheated victims.
Jeffry Picower, 67, a prominent philanthropist, drowned after suffering a heart attack in the swimming pool of his Palm Beach, Florida, mansion on October 25.
Unlike some other Madoff investors, he died a rich man. The trustee unraveling Madoff's financial web said Picower withdrew some $7 billion from his Madoff accounts over the decades - well more than he invested.
That money is now known to have been stolen from other people, and Picower's widow said in a statement this week that the family wished to return some of it through a fair and generous settlement that might help overcome some of the devastation wrought on Madoff's victims.
The exact amount of that settlement is still unknown.
Madoff trustee Irving Picard has sued claiming victims are entitled to get back all $7 billion. The family has argued that under New York law, it should only have to return bogus profits they earned in the past six years, or around $2.4 billion.
On Tuesday, the family's lawyer, William D. Zabel, said the Picowers might be open to paying more than the law would require them to, in order to help the victims of scheme.
Yet the family also made clear that it is trying to protect its own charitable projects. In a will signed on Oct. 15, Picower said he wished to donate most his multibillion-dollar estate to a new philanthropic foundation, minus $200 million for his widow, Barbara, $25 million for his daughter, Gabrielle, and additional millions for grandchildren and other friends and relatives.
The foundation, the will said, would be for broad charitable purposes, although Picower suggested it spend half its money on medical research.
He also gave $25 million to the Picower Institute of Learning and Memory at the Massachusetts Institute of Technology, $1 million each to the New York Public Library, the Harlem Children's Zone and the Nurse-Family Partnership in Denver, Colo. and $4 million to a group of Parkinson's disease research scientists. Picower had Parkinson's disease.
Lawyers for Picard have argued in court papers that Picower must have realized that the implausibly high returns he was getting from Madoff's operation were the result of fraud.
Barbara Picower said in her statement that it was a great tragedy that my husband Jeffry's sudden and untimely death prevented him from seeing the full restoration of his reputation for honesty, integrity and professional achievement.
Zabel said he couldn't discuss how much the family might ultimately be willing to pay in a settlement because the two sides have been in negotiations. Zabel added that the Madoff case has been an albatross for the family, and weighed on Picower personally before his death.
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it still was fraud because he was not investing but blowing the money. There was not real investment. Returns were paid to investors from money paid by new investors and this gentleman was lucky Madoff like him enough to give him all his money back plus some more returns. So basically his returns were made on money used to scam people. May G-d be blessed because he is the final and true judge.
Dear MI, Mr. Madoff ripped people off. He was a con man. Good people like Elie Weisel trusted him. He cheated them. Just because he promised a higher return for their monies than most banks or investments does not make them fair game for being swindled.
Assuming I a correct about this--there is a Halacha that proscribes that any charitable donation, or, even religious benefit, like an aliyah to the Torah is forbidden to for someone who offers an ill-gotten gain. That means if it someone who is not known for their honesty offers a hefty sum to cover his illegal dealings, and, it is a matter of public record, the institution is not allowed to take the donation. This case is a little more complicated, I guess since the man had a rep for being honest, but his broker wasn't. That would be a question for a rabbi who specializes in Hoshen Mispat.
Greed is a horrid disease. There is never enough.
It?s precisely because it was partially fraudulent that the potential returns and the risk were so high
If the returns were so high that Picower must have realized they were "fraudulent", then the same can be said for ALL the investors. If that's the case, everyone ought to be left just where they were when the music stopped. How can it be jsutified to take from one investor and give to another if they all knew or should have know the deal was fraudlent??
The so-called victims deserve none of the money. The higher the potential profit of an investment, the higher the risk. These people opted for a very risky investment because it offered very high potential returns. If they were so stupid that they didn?t realize how risky it was, they shouldn?t have had that much money to begin with. Madoff was actually good for the economy; his investments helped accelerate its rate of growth. The benefit of this was greater than the damage of the crash. Funny how so many writers, including Haaretz journalists, enthusiastically joined the finger-wagging wagon without completely understanding the mechanics of the scheme.