December 11, 2010 / 2:45 PM / 9 years ago

Bernard Madoff's elder son dead in suicide

NEW YORK (Reuters) - Mark Madoff, the elder son of convicted swindler Bernard Madoff, was found hanged in his New York City apartment in an apparent suicide on the second anniversary of his father’s arrest, police and his lawyer said on Saturday.

Police remove Mark Madoff's body from his apartment where he was found dead this morning in New York, December 11, 2010. REUTERS/Jessica Rinaldi

The 46-year-old Mark Madoff, who had worked at his father’s firm, “succumbed to two years of unrelenting pressure from false accusations and innuendo,” his lawyer said. He was found dead in his apartment in the city’s SoHo neighborhood, New York City police spokesman Paul Browne said.

Bernard Madoff, 72, is serving a 150-year prison sentence after confessing to running a decades-long Ponzi scheme that bilked investors out of billions, considered the biggest financial fraud in history.

“Mark Madoff took his own life today. This is a terrible and unnecessary tragedy,” Martin Flumenbaum, a lawyer for Mark Madoff and his younger brother, Andrew, said in a statement. He said “Mark was an innocent victim of his father’s monstrous crime.”

Mark Madoff’s 2-year-old son was in the apartment when the body was discovered by his father-in-law, said police at the scene who declined to be identified.

The Madoff sons and other family members had worked for Bernard L. Madoff Investment Securities LLC, which crumbled when the Ponzi scheme was revealed. Madoff was arrested on December 11, 2008, a day after he said he confessed to his sons, who then turned him in to authorities.

Defrauded Madoff investors have long viewed the convicted swindler’s sons, wife and other family members suspiciously, arguing it is unfathomable that they did not know about Bernard Madoff’s lies. No family members have been criminally charged and they reject accusations that they were aware of the fraud.

Mark Madoff had been distraught over speculation of potential criminal charges against him, said a person familiar with his activities but who was not authorized to speak publicly about him. There had been no indication that any charges were imminent, the source said.

The Wall Street Journal reported in February that Bernard Madoff’s sons and brother were the subject of criminal tax-fraud probes by federal prosecutors in Manhattan.

Ira Lee Sorkin, a lawyer for Bernard Madoff, said Mark Madoff’s death was “a great tragedy at many levels.” He declined comment on whether he had spoken to Bernard Madoff, who is in a North Carolina prison, about his son’s death.

Ruth Madoff, Mark Madoff’s mother, is “heartbroken,” her lawyer, Peter Chavkin, said in an emailed comment.

In the past two years, Mark Madoff had not spoken with either of his parents, the source familiar with his activities said. The person said that Mark Madoff had tried unsuccessfully to get a Wall Street trading job after his father’s arrest.

TRUSTEE’S LAWSUITS

Mark Madoff and other Madoff family members have been sued by the court-appointed trustee Irving Picard trying to recover money for investors defrauded in the Ponzi scheme, a fraud in which early investors are paid with money of new ones.

The trustee says they should have known about the $65 billion fraud and must return money they used to support lavish lifestyles.

Earlier this week, the trustee also sued five Madoff grandchildren, including three children of Mark Madoff, for millions purportedly transferred to them. Mark Madoff and his wife, Stephanie Morgan, had one child, and he had two children with a former wife.

The Madoff fraud shook investors around the world and sparked criticism of market regulators for failing to catch him despite warnings and tips over many years.

For decades, investors big and small flocked to Madoff, hoping to gain entree onto his seemingly exclusive client list as he promised steady returns that defied the broader markets.

He duped an array of charities, plus well-known people such as Holocaust survivor Elie Wiesel and Hall of Fame baseball pitcher Sandy Koufax, in his Ponzi scheme.

Madoff has insisted he acted alone. Since his confession, seven other people have been arrested in the case, including several of his long-time employees and an outside accountant.

Slideshow (7 Images)

Picard, the court-appointed trustee, has been rushing to file lawsuits in recent weeks against people and financial firms linked to Madoff ahead of the two-year deadline to bring such cases. The trustee called Mark Madoff’s death a tragic development.

In an October 2009 lawsuit, the trustee said Mark Madoff and other family members who worked at the firm were “completely derelict in duties and responsibilities” and used money they made to buy everything from luxury vacation homes to expensive restaurant meals.

Mark Madoff joined the firm in 1986, and he and his brother Andrew went on to run the market making and trading arm of Madoff’s business. The trustee says that while that part of the business was ostensibly legitimate, they also played roles at times in the fraudulent investment advisory unit.

Reporting by Martha Graybow, Dan Trotta, Chris Michaud and Grant McCool; Editing by Jackie Frank and Vicki Allen

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