Judge to hear potential conflict in Madoff case

NEW YORK (Reuters) - A court appearance on Wednesday by accused swindler Bernard Madoff for a hearing over a potential conflict of interest involving his lawyer, Ira Sorkin has been postponed, a judge's clerk said on Tuesday.

The clerk for the judge in U.S. District Court in Manhattan said no new date had been scheduled for the hearing, which was announced earlier on Tuesday. No reason was given for the change but both U.S. prosecutors and Sorkin consented to it, the clerk said.

The hearing before Judge Leonard Sand had been called at the request of U.S. prosecutors over a potential conflict of interest for Sorkin in his representation of two accountants in a 1992 case brought by the U.S. Securities and Exchange Commission (SEC).

The accountants, Frank Avellino and a partner, Michael Bienes, invested with Madoff, court documents in the case showed. In a deal with the SEC, Avellino shut down his firm, returned money to investors and paid a $350,000 fine.

Madoff was not sued by the SEC in the 1992 case.

Sorkin said earlier that the hearing would also address his father having had a retirement account with Madoff before he died in 2001.

The U.S. Attorney's office in New York declined comment.

Sorkin said he never invested with Madoff. He said his father had a retirement account that was passed to his mother when the father died in 2001. Sorkin said he received her mail for several years before her death in 2007.

Madoff, 70, has been charged in a $50 billion worldwide Ponzi scheme in which early investors are redeemed with the money of new clients.

The once-respected Wall Street trader and investment manager was arrested and charged with fraud on December 11 after authorities said he confessed to running the scheme over many years. He is the only person charged in the purported fraud and has not appeared in court to formally answer the charge.

Madoff is under house arrest in his luxury Manhattan apartment and may leave the building only for court appearances.

The case is USA v Madoff 08-mj-02735 in U.S. District Court for the Southern District of New York (Manhattan)