Marc Rich loses money in Madoff scheme


The New York Times follows up on the news that Marc Rich lost $10 million to $15 million in the Madoff Scheme, via his investments with J. Ezra Merkin:

He and another person, also knowledgeable about Mr. Rich’s finances, said the loss stemmed from Mr. Rich’s association with the money manager J. Ezra Merkin.

Mr. Merkin, a hedge fund investor whose Park Avenue firm said until recently that it had $5 billion under management, has invested for Mr. Rich for years. Mr. Merkin told his clients last month that he had entrusted more than $1 billion of their money to Mr. Madoff and that the likelihood of recovery was difficult to gauge. At least two of those clients, New York University and New York Law School, have sued Mr. Merkin, claiming he mishandled their money and misrepresented how he operated.

The Times notes the irony of this onetime fugitive turning to U.S. courts:

The idea that Mr. Rich, once a fugitive, may now turn to an American court to seek redress struck some lawyers as fraught with problems and unlikely at best. “I don’t think you’ll ever see Marc Rich personally,” as a plaintiff in an American courtroom, said John F. Fornaciari, a Washington defense lawyer at Sheppard Mullin, who stifled a laugh about the legal complications stemming from the flight from justice and the contested pardon.

“If there’s some way for him to sue because the investments were made by a corporation, and it was arguably corporate money, and it had a president and it wasn’t him, and they lost money in the Madoff scandal, then that corporation might be able to sue without him being required to show up,” Mr. Fornaciari said. “But if there’s anything that required him to show up, he’s not coming.”

Gerald B. Lefcourt, a former president of the National Association of Criminal Defense Lawyers, also gauged the likelihood of Mr. Rich’s pressing a claim as “little or none.”

“He’ll never appear for discovery proceedings that will be required, and he’s not going to be sympathetic to any party, including the courts, after his failure to appear, notwithstanding the fact he was pardoned,” Mr. Lefcourt said. The pardon backfired in some ways by igniting public outrage and inviting prosecutorial interest in the process for a man who has generally sought to keep a low profile. For that reason, one longtime associate said he doubted Mr. Rich, who he said was not an acquaintance of Mr. Madoff’s, would seek any relief from the courts.

It appears Merkin and Rich met in shul, at Fifth Avenue Synagogue.

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