April 6, 2009

VIDEO: Ezra Merkin Charged With Fraud in Madoff Case

Another big name going down:

VIDEO: Ezra Merkin Charged With Fraud in Madoff Case

New York Atty. Gen. Andrew Cuomo today charged money manager J. Ezra Merkin with civil fraud in the Bernie Madoff Ponzi scheme, alleging that Merkin funneled more than $2.4 billion in clients’ funds to Madoff while ignoring "glaring red flags."

Merkin, a well-known New York philanthropist and the former chairman of General Motors Corp.’s financing arm, GMAC Financial Services, "profited enormously from Madoff’s scheme, reaping huge commissions while investors lost all their money," Cuomo said in a statement.

Merkin earned $470 million in management and incentive fees over time by steering money to Madoff, Cuomo said.

"Merkin duped individual investors, non-profits, and charities into believing he was responsibly managing their investments, when in actuality he was dumping them into history’s largest Ponzi scheme," Cuomo said.

Andrew Levander, Ezra Merkin's attorney, said his client would "vigorously defend" against Cuomo's suit, which Levander called "hasty and ill-conceived."

Ezra Merkin, 55, has said he was stunned by Madoff’s scheme. He is already facing suits from other clients, including New York University and Mort Zuckerman, publisher of the New York Daily News.

Ezra Merkin’s funds, including Gabriel Capital and Ariel Fund, were "feeder" funds for Madoff. Cuomo alleges that Merkin presented himself to clients as an "investing guru," but says his true role was "master marketer."

VIDEO: Ezra Merkin Charged With Fraud in Madoff Case

Posted at April 6, 2009 1:42 PM