Today, Attorney General Andrew Cuomo unleashed fraud charges against J. Ezra Merkin, a money manager. The press release from Cuomo's office was titled "MADOFF MIDDLEMAN EZRA MERKIN CHARGED WITH FRAUD FOR SECRETLY STEERING $2.4 BILLION IN INVESTOR ASSETS INTO MADOFF’S PONZI SCHEME."
Cuomo says that Merkin funneled $2.4 billion from "investors, including several prominent charities and non-profits" into Bernard Madoff's fake investment fundwill collecting "$470 million in management and incentive fees". Cuomo says Merkin was not an "investing guru" but just a "master marketer"; Cuomo also called him a "glorified mailbox" (!!). Some more of Cuomo's claims: "Merkin made statements indicating that only 15 percent of Ascot [one of Merkin's many funds] was invested with Madoff; in reality the entire fund was invested in Madoff... Merkin told one investor that all of Ascot’s assets were maintained in a Morgan Stanley brokerage account."
Merkin's lawyer said Cuomo's civil suit was “hasty and ill-conceived," adding, "Mr. Merkin's due diligence, just like the detailed investigations performed by countless others, including regulators, was thwarted by the intricate, fraudulent scheme perpetrated by Madoff." Crain's New York also excerpted an e-mail message from Merkin's former money manager Victor Teicher, apparently sent to Merkin the day Madoff's scheme was revealed: “The Madoff news is hilarious; hope you can negotiate your way out of this mess as well as possible. I’m yours to help in any way I can. Unfortunately, you’ve paid a big price for a lesson on the cost of being greedy.”
