Madoff Trustee Has Filed 100 Lawsuits for Defrauded Clients

The trustee seeking money for defrauded former clients of Bernard Madoff filed several dozen lawsuits Tuesday to recover more than $1 billion, including one complaint seeking to recover from an affiliate of private equity executive Thomas H. Lee.

Irving Picard, the court-appointed trustee, had filed 100 lawsuits in the U.S. bankruptcy court in Manhattan by 4 p.m. EST (2100 GMT) Tuesday.

The filings are part of a series of “clawback” lawsuits that Picard has brought against investors who withdrew money from Bernard L. Madoff Investment Advisors LLC before that firm’s collapse on Dec. 11, 2008.

Picard has filed lawsuits to recover more than $18.5 billion, including $2 billion from Swiss bank UBS AG; sums from “feeder funds” that sent client money to Madoff; and various amounts from Madoff relatives, including his wife Ruth.

The trustee has said he recovered $1.5 billion for Madoff victims through Sept. 30.

Picard must file his lawsuits before the two-year anniversary of the demise of Madoff’s firm. He is seeking sums withdrawn in the six prior years, a limitation imposed under New York law.

Madoff, 72, pleaded guilty in March 2009 to running what prosecutors called a $65 billion Ponzi scheme. He is serving a 150-year sentence in a North Carolina federal prison.

Picard’s lawsuit against Blue Star Investors LLC, the Lee affiliate, resembles many of his clawback lawsuits.

According to the complaint, Blue Star had received $51.75 million since Dec. 11, 2002 from Madoff’s firm, of which $19.67 million represented “fictitious profits” in that Blue Star withdrew more than it invested.

Lee later received sums transferred from Blue Star and is responsible for repaying them, the complaint said.

“Defendant has received $19,667,135 of other people’s money,” wrote Richard Bernard, a lawyer representing Picard. Both are partners at Baker & Hostetler LLP in New York.

Lee was not immediately available for comment. A spokesman for Lee declined to comment. A spokesman for Picard had no comment on the trustee’s imminent plans for filing lawsuits.

Picard has said he would sue Madoff clients, including perhaps 1,000 individuals, whom he considers “net winners” withdrawing more from Madoff’s firm than they invested.

Many of these investors consider themselves victims and say they should be compensated based on sums, even if false, shown on their final account statements. Some are appealing the rejection of this approach by U.S. Bankruptcy Judge Burton Lifland, who oversees the liquidation of Madoff’s firm.

The Lee case is Picard v. Blue Star Investors LLC c/o Thomas H. Lee Capital LLC, U.S. Bankruptcy Court, Southern District of New York, No. 10-ap-04347.

(Reporting by Jonathan Stempel in New York; additional reporting by Megan Davies; editing by Gerald E. McCormick and Andre Grenon)