The trustee tasked with unwinding Bernie Madoff’s fraud is trying to block the state from paying $410 million to investors with fallen money manager Ezra Merkin, The New York Post reported yesterday. Irving Picard, the court-appointed trustee responsible for clawing back money for Madoff victims, wants a bankruptcy judge to block a settlement between New York Attorney General Eric Schneiderman and Merkin, who has been accused of secretly steering client money to Madoff’s massive Ponzi scheme. In a sharply worded motion filed with the U.S. Bankruptcy Court in Manhattan, Picard said that Schneiderman’s settlement will “wreak havoc” on his efforts to recover funds for Madoff victims. “Every victim should be treated equally,” Picard said. “That fundamental principle cannot be abrogated by the state of New York.” Picard said he is seeking to recover $500 million from Merkin and his funds, which invested in Madoff’s $20 billion scheme.
