The trustee liquidating Bernard Madoff’s former firm asked a federal appeals court to block a $410 million settlement between the state of New York and money manager J. Ezra Merkin.
New York Attorney General Eric Schneiderman announced the settlement with Merkin, who controlled four funds that fed more than $2.4 billion of investor money into Madoff’s fraud, in June 2012. Trustee Irving Picard tried to block the deal, claiming it would hamper his efforts to collect assets for Madoff investors.
In arguments before the appeals court in Manhattan today, David Sheehan, a lawyer for Picard, asked a three-judge panel to reverse lower court decisions permitting the settlement to go forward.
Andrew Cuomo, New York’s former attorney general and now the state’s governor, sued Merkin in 2009 claiming Merkin and his Gabriel Capital Corp. defrauded investors, including charities and educational institutions, by turning their money over to Madoff without disclosing the con man’s role.
Madoff is serving a 150-year sentence after pleading guilty to a fraud that wiped out $17 billion of customers’ principal.
The case is Picard v. Schneiderman, 13-01785, Second U.S. Circuit Court of Appeals (Manhattan).