Madoff accepted $10m investment six days before arrest says lawsuit
NEW YORK (Bloomberg) — Just six days before he was charged with running a $50 billion Ponzi scheme, Bernard Madoff allegedly agreed to invest $10 million for a family that had turned an ice delivery business into one of the largest independent heating oil distributors in New York City.
Rosenman Family LLC, managed by Martin Rosenman, president of Bronx-based Stuyvesant Fuel Service Corp., sued Irving Picard, the trustee appointed to supervise the unwinding of Madoff's business. He is seeking a ruling that Picard has no claim to the $10 million. Rosenman, who hadn't previously invested with Bernard L. Madoff Investment Securities LLC, said he spoke by phone with Madoff on December 3 about investing the money, according to a complaint filed on January 1 in bankruptcy court in Manhattan.
"Madoff stated that the fund was closed until January 1, 2009, but that Mr. Rosenman could wire money before that date into a Madoff account, "where it would be held until the fund opened after the new year", according to the complaint. Rosenman's lawyers said Madoff was recommended as "safe and reliable".
Madoff's firm collapsed last month after he told his sons it was a fraud, according to a criminal complaint by the FBI. The firm is liquidating under the Securities Investor Protection Corp., whose funds cover securities and cash claims of as much as $500,000 per customer, including as much as $100,000 in cash.
Stuyvesant, acquired by Hess Corp. last year, was launched in 1934 by Rosenman's grandfather as an ice delivery firm and evolved into a coal supplier.