Stanley Chais, Jeffrey Picower and Carl Shapiro each lost tens of millions of dollars when Bernard Madoff’s monstrous Ponzi scheme fell apart. Their charitable foundations were hammered, and this month Chais was sued by the court-appointed trustee overseeing the liquidation of Madoff’s assets, who said Chais was the first number on Madoff’s speed dial and had “intimate knowledge” of the fraud.
Chais fired back and denied being in on the scam. But now he and seven other investors are being investigated for possible criminal violations.
From the Wall Street Journal, via Reuters:
The paper named three investors under investigation by the U.S. Attorney’s Office, including Jeffry Picower and Stanley Chais, two philanthropists who are the target of lawsuits brought by the trustee liquidating the Madoff firm.
Carl Shapiro, a women’s clothing entrepreneur and close friend of Madoff, is also under criminal investigation, the article said.
Investigators have gathered evidence of Picower and Chais telling Madoff how much in returns they wanted and that their accounts would reflect the amounts, the paper said. It said investigators were also reviewing evidence suggesting Shapiro knew his returns were fraudulent.
The paper said prosecutors have not charged any Madoff investors with criminal wrongdoing.
The Journal quotes a lawyer for Chais, 82, and a representative of Shapiro, 96, as saying the men had no knowledge of the fraud. A lawyer for Picower, 67, told the paper his client was not complicit in the scheme and had suffered billions in losses.
