Jaffe Seeks to Enforce Shapiro Settlement in Madoff Case

Robert Jaffe, the son-in-law of Boston-based philanthropist Carl Shapiro, asked a judge to enforce a $625 million settlement in the Bernard Madoff bankruptcy case and block further lawsuits.

Shapiro, one of Madoff’s first clients, along with 19 family members, settled potential lawsuits in December by agreeing with the trustee liquidating the jailed conman’s estate to forfeit $625 million in profits from the Ponzi scheme.

A U.S. bankruptcy judge said in February that he lacked jurisdiction to stop third-party lawsuits against Jaffe, the former vice president of Cohmad Securities Corp., according to a court filing. Jaffe appealed the decision yesterday in U.S. District Court in Manhattan.

Jaffe and Cohmad, a brokerage that shared a Manhattan building with Madoff’s firm, were sued in June 2009 by trustee Irving Picard, who alleged they were part of the Madoff network and took more money out of the Ponzi scheme than they put in. December’s settlement included $38 million paid on behalf of Jaffe and others, “satisfying in full the trustee’s claims,” according to a court filing.

Under the Shapiro settlement, the family agreed to turn over $550 million to Picard for distribution to Madoff investors. Another $75 million was earmarked for the U.S. Justice Department, which appointed Picard as a special master to distribute those funds.

The appeal is Jaffe v. Picard, 11-01993, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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