NEW YORK, Oct 26 — Jeffry M. Picower, a prominent philanthropist accused of reaping about US$7 billion (RM23.67 billion) in profit from Bernard L. Madoff’s vast Ponzi scheme, was found dead yesterday afternoon in a swimming pool at his mansion in Palm Beach, Florida.
In the last year, Picower’s life had become a tangle of litigation arising from his disputed role in the Ponzi scheme operated by Madoff, who was arrested in December and pleaded guilty in March to operating a long-running fraud that cost thousands of victims billions of dollars.
The cause of Picower’s death is being investigated. According to a statement from the Palm Beach police, emergency personnel responded at 12:09 p.m. yesterday to a call from Picower’s wife, Barbara. She said that she had found her husband at the bottom of the pool at the family home, an oceanfront property on South Ocean Boulevard. He could not be revived and was pronounced dead at 1:30 p.m. at Good Samaritan Medical Center in West Palm Beach.
An autopsy has been ordered to confirm the cause of death. William D. Zabel, a family lawyer, said that Picower, who was 67, had a history of “cardiac issues” and had Parkinson’s disease.
Picower was a well-known Wall Street investor and, with his wife, was also a prominent philanthropist. They established the Picower Institute for Learning and Memory at the Massachusetts Institute of Technology in 2002, and their own charity, the Picower Foundation, had been contributing to education, medical research and human rights initiatives since 1989.
Initially, the Picowers were notable as victims of the Madoff fraud.
Indeed, the Picower Foundation was forced to close its doors in December because its entire endowment had been entrusted to Madoff.
On May 12, the bankruptcy trustee seeking assets for Madoff victims sued the Picowers in federal court to recover at least US$6 billion they withdrew from their Madoff accounts over the years.
The lawsuit claimed that the Picower accounts with the Madoff firm were “riddled with blatant and obvious fraud” that a finance professional like Picower should have detected immediately.
It further asserted that he “knew or should have known” that the large and unusually reliable profits they withdrew from their Madoff accounts could only have been the product of a fraud.
The trustee, Irving H. Picard, had claimed in a court filing that Picower was having trouble getting his money back from Madoff at least as early as September 2003 and, on several occasions, was able to retrieve only “a fraction of the amount” he had requested from Madoff.
That failure to pay should have put Picower on notice that Madoff’s money-management business was a fraud, Picard asserted.
He also claimed that one Picower account with Madoff was overdrawn by US$6 billion when Madoff was arrested in December. That amount was “clear evidence something was seriously amiss,” the trustee’s filing continued, because “no legitimate broker-dealer would allow this investor to maintain such a staggering margin balance.”
The Picowers have emphatically denied any knowledge of the Ponzi scheme, and Zabel has said they, along with other investors and regulators, were deceived by Madoff.
Recently, the Picowers acknowledged that the scandal and its aftermath had become a punishing experience, both emotionally and physically.
“We always have been private people, and having all this play out in the media has taken a big toll on our health,” the couple wrote in response to questions submitted earlier this month by The New York Times.
“We feel stunned, betrayed, angry, sickened, devastated,” they continued. They coped, they said, by drawing strength “from each other and from the knowledge that we did nothing wrong.”
Zabel has previously said that the Picowers had initiated settlement discussions with the trustee “to avoid years of extensive litigation.”
Zabel said last evening that the talks were continuing and “progress was being made” when he last spoke with Picower three days ago.
Picard acknowledged meeting with the Picowers’ lawyer but declined to comment further on any settlement talks.
Picard has also sued others, including Stanley Chais, a Los Angeles investment manager whose clients lost millions in the fraud.
Picard asserts that he too should have been suspicious of the fraud when the trades that Madoff’s firm provided in financial statements did not correspond to daily market transactions. — NYT
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