A federal bankruptcy judge yesterday narrowed a $905 million lawsuit filed by the trustee seeking money for Bernard Madoff's victims against executives who ran a now-defunct Florida accounting firm that had close ties to the swindler, Reuters reported. Bankruptcy Judge Stuart Bernstein said that Irving Picard cannot recover alleged improper transfers made before 2001 to Palm Beach-based Avellino & Bienes, which ran the earliest "feeder funds" that sent client money to Madoff. The decision is a setback for Picard, in one of the larger of his more than 1,000 lawsuits seeking to recoup money from people he believes benefited improperly from Madoff's fraud. Picard accused principals Frank Avellino and Michael Bienes of helping conceal Madoff's Ponzi scheme, including in 1992 when Madoff created fake account statements to help their firm defend itself in a U.S. Securities and Exchange Commission probe. The trustee said the duplicity enabled Avellino, Bienes and their wives to reap millions of dollars to buy multiple luxury homes, art by Pablo Picasso and Edgar Degas for the Avellinos, and a cold storage compartment to store Dianne Bienes' furs. But in a 62-page decision, Judge Bernstein agreed with the defendants that Picard lacked power to recover transfers made before Jan. 1, 2001. Read more.
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