A Forest Hills−based charity is suing Queens native Bernard Madoff for $10 million after it lost about $2.5 million in the $50 billion Ponzi scheme Madoff created, according to papers filed in Queens Supreme Court.
Attorneys for the FLB Foundation, a nonprofit corporation on Queens Boulevard that funded mental health and drug rehabilitation programs, filed the lawsuit in early February charging Madoff, members of his family, and Madoff’s companies with fraud and conspiracy. Attorneys for FLB state in court papers they are seeking $10 million in punitive damages.
Bob Finkin, FLB’s president, said Friday he did not want to comment on the lawsuit. He would not say whether the foundation continues to operate.
The New York Post reported Finkin, 80, first met Madoff in 1966 and began investing personal funds with the financier, who grew up in Laurelton. According to the Post, Finkin lost $350,000 of his own money.
Madoff, who worked as a lifeguard in the Rockaways as a young man, turned himself in to the FBI in December and admitted losing $50 billion of his clients’ money, the criminal complaint said.
Madoff’s victims were led to believe he was investing their money, where their return on investment was up to 12 percent, a figure that continually outperformed the market.
The court−appointed trustee who is handling Madoff’s finances said two weeks ago there were no indications the Queens native ever invested his clients’ funds and contended that the fraud was a Ponzi scheme, where the perpetrator makes payments to early investors using funds from newer clients.
Forest Hills, an affluent and heavily Jewish neighborhood, was the borough’s area hardest hit by Madoff. Madoff is Jewish and a large portion of his clients are Jews.
Twenty−four accounts from Forest Hills individuals, families, businesses and trusts were hurt by the Ponzi scheme, according to documents filed in bankruptcy court in Manhattan.
Other high−profile Madoff victims include Holocaust survivor and author Elie Wiesel’s foundation, New York Daily News publisher Morton Zuckerman and co−owner of the New York Mets Fred Wilpon.
North Shore Towers, a Floral Park co−op, was second to Forest Hills in its number of victims.
At a meeting set up by the North Shore Towers Country Club, former Republican congressional candidate and securities law attorney Liz Berney, whose firm Cohen Milstein Hausfeld & Toll is working on a couple of Madoff cases, said legislation passed in the mid−’90s made it more difficult to bring fraud cases against brokerage firms.
“It led to a lot of frauds,” Berney said, referring to the Private Securities Litigation Act of 1995.
Asked why the Securities and Exchange Commission was not aware of the Ponzi scheme earlier, Berney said “the SEC doesn’t have enough resources to do anything.”
Berney, who is not personally representing any Madoff victims, said those who were defrauded may be able to recover their losses through so−called feeder funds, institutions that collected money on Madoff’s behalf.
“He should be in jail and rot there forever,” she said.
Reach reporter Anna Gustafson by e−mail at agustafson
©2009 Community News Group
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