Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Madoff trustee sues accountants for $900 million

madoff.gi.top.jpgBernard Madoff pleaded guilty in 2009 to running the most massive Ponzi scheme in history. By Catherine Tymkiw, producer


NEW YORK (CNNMoney.com) -- The court-appointed trustee in the recovery of assets stolen by Bernard Madoff accused two accountants, along with members of their families, of covering up the Ponzi-schemers actions.

Trustee Irving Picard filed a complaint late Friday against Frank Avellino, Michael Bienes, their wives, son Thomas Avellino as well as other family members, for allegedly hiding Madoff's fraudulent activity.

Picard is seeking to recover $900 million from the group.

"Frank Avellino and Michael Bienes are among the earliest enablers of Bernard Madoff's," said Picard in a statement. "They operated [Madoff's] first feeder fund, a partnership known as Avellino & Bienes, which not only fueled the initial growth of the Ponzi scheme, but also helped sustain it for years."

According to the complaint, Avellino and Bienes knew about the fraud for years but still touted Madoff as a "legitimate investment professional" to investors. The complaint states that the two CPA's actions reached back as far as 1992.

The trustee's attorney, Baker & Hostetler partner David Sheehan, said Avelline and Bienes "observed blatant and obvious red flags which would have put a reasonable person, let alone licensed CPAs, on clear notice that [Madoff] was operating fraudulently."

The lawsuit comes on the heels of another suit, filed earlier in the day. Picard is also suing an Austrian banker, seeking to recover $19.6 billion.

The trustee has filed a wave of lawsuits ahead of the second anniversary of Madoff's arrest on Dec. 11, 2008. Madoff pleaded guilty in March, 2009 in federal court for orchestrating the largest Ponzi scheme in history. He was sentenced to 150 years and is incarcerated at a medium security federal prison in North Carolina.

-- Staff writer Aaron Smith contributed. To top of page

Index Last Change % Change
Dow 17,773.64 -57.12 -0.32%
Nasdaq 4,775.36 -29.93 -0.62%
S&P 500 2,065.30 -10.51 -0.51%
Treasuries 1.82 -0.02 -1.03%
Data as of 5:36pm ET
Company Price Change % Change
Bank of America Corp... 14.56 -0.23 -1.56%
Freeport-McMoRan Inc... 14.00 1.34 10.58%
Ford Motor Co 13.56 -0.53 -3.76%
Apple Inc 93.74 -1.09 -1.15%
Microsoft Corp 49.87 -0.03 -0.06%
Data as of Apr 29
Sponsors

Sections

The Oracle of Omaha joked that the impact on Corporate America would not be the biggest problem of a Donald Trump presidency. More

The Dow is down 300 points over the past two days, leaving the index on track for its worst week since early February. Blame fumbled earnings reports from the likes of Apple and Google as well as concerns about the Bank of Japan. More

Now you can watch the SpaceX Falcon 9 rocket land on a barge as if you were standing on the deck of the ship. More

Visa says new software will allow consumers to check out with chip cards as fast as swiping a card with magnetic strip. More