Cuomo Said to Subpoena Merkin, 15 Nonprofit Groups
New York Attorney General Andrew Cuomo subpoenaed J. Ezra Merkin, the former GMAC Financial Services chairman, and 15 nonprofit entities in an investigation of alleged charity fraud connected to the Bernard Madoff scandal, a person familiar with the probe said, Bloomberg reported.
Cuomo, whose office oversees nonprofits in New York, said on Jan. 13 that "a number of charities" were defrauded by the alleged $50 billion scam. Their losses may exceed $100 million, he said today.
"We have facts and info there are also charities that were victimized in this," Cuomo said at a news conference in Manhattan. "To steal from a charity in essence really does add insult to injury."
Bard College, a liberal-arts school in New York State's Hudson Valley, received a subpoena yesterday for documents related to Merkin after reporting $3 million in losses tied to Madoff, said Mark Primoff, a spokesman for the school, in a telephone interview today.
The charity-fraud probe "could be criminal, could be civil, depending on the facts," Cuomo said. He said previously that he isn't investigating Madoff, 70, who was charged last month by federal prosecutors with allegedly bilking clients in a Ponzi scheme that used money from new investors to pay old ones.
"It's a welcome development," investor attorney Jacob Zamansky said of the subpoenas. Zamansky said he represents 10 investors and three charitable foundations that allege losses through Merkin's funds.
Andrew Levander, a lawyer for Merkin, said his client will "fully cooperate with any investigation by the New York Attorney General's office" while "vigorously" fighting any lawsuits brought against him by investors.
"Mr. Merkin and his family are personally among the largest victims of the massive fraud confessed by Bernard Madoff," Levander said in an e-mailed statement. "Like the other victims and the entire financial community, Mr. Merkin is shocked by these events."