Irving Picard, the trustee for Bernard Madoff’s bankrupt firm, made “absurd” claims about money being withheld from the Ponzi scheme’s victims while fighting to stop a $410 million settlement, a lawyer for New York Attorney General Eric Schneiderman said, Bloomberg reported yesterday. Picard said last month that the settlement, negotiated by Schneiderman with former Madoff investor J. Ezra Merkin, will allow Merkin to use money stolen from customers to help fend off Picard lawsuits demanding $500 million. A lawyer for Picard called Merkin’s $410 million agreement to compensate victims, sealed in federal court in Manhattan, “illusory.” While lawyers defending Merkin in other cases will be paid and Schneiderman will recoup $5 million for three years of litigation against Merkin, most of the money will go to Ponzi victims, he said. The case is Picard v. Schneiderman, 12-cv-06733, U.S. District Court, Southern District of New York (Manhattan).
