MADness Runs in the Family

It appears fraud is genetic, and boy do those genes show in this au pair. Ponzi King Bernard Madoff’s brother is under criminal investigation for the multi-billion dollar fraud as well.

Peter Madoff’s lawyer Charles Spada said in court papers made public Wednesday that Madoff is a “subject” of their wide-ranging probe and his “career, assets, and family all are under intense scrutiny.”

The other brother was senior managing director and chief compliance officer at Bernard L. Madoff Securities, LLC. Spada disclosed the probe as he explained why his client refused to answer questions at a deposition in a lawsuit brought by a charitable foundation of New Jersey Sen. Frank R. Lautenberg, and said Madoff had “a reasonable fear that his statements might be used against him in that investigation.”

The foundation is seeking damages for money lost because of the fraud Bernard Madoff revealed in 2008. Bernard Madoff is serving a 150-year sentence after pleading guilty to the fraud. Authorities have also prosecuted two of Madoff’s firm’s computer programmers and his longtime auditor.

Irving Picard, a court-appointed trustee in the New York lawsuit, is seeking $198.7 million from Peter Madoff, who worked in the investment firm since 1965, and from Bernard Madoff’s sons, Mark and Andrew. Picard said the family used the family used the business like a “piggy bank.”

Where the New Jersey suit is concerned, Ronald J. Riccio, the Lautenberg Foundation lawyer, has sought sanctions against Peter Madoff after he invoked the Fifth Amendment for most of the 290+ questions asked in the three-hour period November 12.

“Given the circumstances and intensity of the criminal investigation, one can hardly question defendant’s constitutional right not to answer questions about his brother … and virtually any related topic for fear that such answers might `furnish a link in the chain of evidence’ for a criminal prosecution,” Spada wrote.

Janice Oh, a spokesowman for prosecutors in Manhattan, had no comment on Spada’s filing.