Judge to hear potential conflict in Madoff case

NEW YORK (Reuters) - Accused swindler Bernard Madoff will appear in court on Wednesday for a hearing over a potential conflict of interest involving his lawyer, Ira Sorkin, the lawyer said on Tuesday.

Sorkin said the hearing in U.S. District Court in Manhattan concerns two accountants he represented in 1992 in a case brought by the U.S. Securities and Exchange Commission (SEC).

The accountants, Frank Avellino and a partner, Michael Bienes, were linked to 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 Wednesday’s hearing, requested by U.S. prosecutors, 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.

“This is about a potential conflict over my 1992 case with Avellino and Bienes and my father had an account,” Sorkin said.

Madoff will appear at the hearing before U.S. District Court Judge Leonard Sand, the lawyer said. A clerk in the judge’s chambers said the hearing was scheduled for 10 a.m.

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.

Last month, Sorkin’s name appeared on a mailing list of 13,000 individuals and institutions filed by the trustee winding down Bernard L. Madoff Investment Securities LLC in U.S. Bankruptcy Court in New York.

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