Madoff Trustee Hits Ex-GMAC Chair With $500M Suit

Law360, New York (May 7, 2009, 12:00 AM EDT) -- The trustee liquidating Bernard L. Madoff's investment firm has filed a $500 million suit against financier J. Ezra Merkin, alleging that he knew that Madoff was running a massive Ponzi scheme.

The fraud suit by trustee Irving Picard, filed Thursday in the U.S. Bankruptcy Court for the Southern District of New York, seeks the return of hundreds of millions of dollars in “nonexistent principal” that Merkin allegedly withdrew from Madoff's firm before it collapsed.

The suit describes Merkin, the former chairman of GMAC Financial Services LLC,...
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