Oct. 26 (Bloomberg) -- Jeffry Picower, the philanthropist alleged to have withdrawn more than $7.2 billion from Bernard Madoff’s investment company, died of a heart attack yesterday in the pool of his Palm Beach, Florida, home.

An autopsy by the Palm Beach County Medical Examiner’s Office on Picower today “determined he suffered a heart attack while in the swimming pool resulting in accidental drowning,” the Palm Beach Police Department said in a statement. He was 67.

Picower’s wife, Barbara, told dispatchers yesterday she found him “at the bottom of their swimming pool” at their oceanfront estate shortly after noon, police said. He was taken to Good Samaritan Hospital, where he was pronounced dead about 80 minutes later.

William Zabel, Picower’s attorney, said in a statement today that the autopsy showed the cause of death was “drowning as a result of a massive heart attack.”

Picower benefited more from Madoff’s $65 billion Ponzi scheme than any other investor, according to Irving Picard, the lawyer liquidating Madoff’s investment business. Picard sued Picower, his foundation and related entities, saying they withdrew more than $7.2 billion over 20 years, including upward of $5 billion in fake profits.

Picower, the Palm Beach-based foundation and related defendants should have known that the annual returns they were getting from Madoff -- including some allegedly as high as 950 percent -- were the result of fraud, according to Picard’s complaint. Picower said those figures are wrong.

Suit ‘Will Continue’

Picard said that Picower received more than $2.4 billion from the fraud during the past six years alone, and that his accounts “were riddled with blatant and obvious fraud.”

“The lawsuit will continue against the Picower estate and other defendants,” Picard said today in an e-mail. He declined to speculate on the Picowers’ worth or on how much the suit might garner for Madoff’s victims.

Zabel, in a court filing, said Picower was a victim of Madoff’s fraud rather than a beneficiary, as Picard claimed in his civil complaint in bankruptcy court in New York.

“Rather than recognizing Mr. Picower and the other defendants as victims of Madoff’s fraud, the trustee instead casts them as villains in history’s largest Ponzi scheme,” Zabel said in the July 31 filing seeking dismissal of Picard’s so-called clawback complaint.

Trustee’s Lawsuits

Madoff, 71, pleaded guilty in March and is serving a 150- year prison term for using money from new clients to pay earlier investors. Picard is suing Madoff’s biggest investors and beneficiaries, including offshore hedge funds.

The Picower Foundation, run by Barbara Picower, gave away $163.9 million from 2002 to 2008, according to the July 31 filing in response to the Picard lawsuit.

Among the institutions that benefited from Picower’s giving were the Massachusetts Institute of Technology, which used a $50 million donation from Picower in 2002 to fund a brain- research center under Nobel prize-winner Susumu Tonegawa.

The Zabel filing described Picower as a “highly successful businessman and private investor who also is an inactive certified public accountant and retired attorney.”

Picower and related entities netted almost $1 billion in 2004 on the sale of Alaris Medical Systems Inc., where he had been chairman, according to the filing.

30-Year Relationship

He also was chairman of Decisions Inc., the principal entity through which he transacted his investment business and a defendant in the Picard complaint, according to the filing.

Over 30 years, Picower invested “huge sums of money” with Bernard L. Madoff Investment Securities LLC on behalf of himself, his business, his family and his charitable foundation, according to the filing.

“Mr. Picower invested with BLMIS because he trusted Bernie Madoff, who he -- and the world -- believed to be a brilliant trader, a successful businessman, an industry leader, and a pillar of the financial community,” according to the filing.

Picower learned the “ugly truth” only upon Madoff’s arrest on Dec. 11, 2008, according to the filing.

“The consequences of Madoff’s betrayal to all BLMIS investors, including Mr. Picower and the other defendants, was devastating,” according to the filing.

“For Mr. Picower’s wife, Barbara, the consequences of Madoff’s fraud were immeasurable, as it caused the closure of the Picower Foundation, which Mrs. Picower had nurtured and to which she had devoted herself over many years,” it said.

To contact the reporters on this story: David Voreacos in Newark, New Jersey, at dvoreacos@bloomberg.net; Jerry Hart in Miami at jhart@bloomberg.net.

Last Updated: October 26, 2009 14:41 EDT