Times: Shocked J. Ezra Merkin Hit by Cuomo with Madoff Aftershock Subpoenas

Aftershocks of the Madoff upheaval have hit now as NYS AG Andrew Cuomo goes after J. Ezra Merkin with subpoenas. Yeshiva University and Ramaz School also among those served with legal papers. Merkin will "fully cooperate."
Financier Faces Inquiry in Madoff Case

The New York attorney general, Andrew M. Cuomo, has issued subpoenas in an effort to determine if the financier J. Ezra Merkin defrauded universities and charities when he invested their money with Bernard L. Madoff, a person with knowledge of the case said Thursday.

Mr. Cuomo’s office is seeking information from Mr. Merkin, three investment funds that he operated and 15 nonprofit institutions that gave him money to manage. Many of the institutions are now suing Mr. Merkin, claiming that they lost millions of dollars when he invested money with Mr. Madoff without their knowledge. Mr. Madoff is accused of running what he is said to have described as a $50 billion Ponzi scheme.

The person with knowledge of the case said the investigation would examine whether Mr. Merkin properly disclosed where the money was being invested. The institutions are being asked to provide information about how they were affected by the Madoff scandal. The subpoenas were issued last night and reported this morning in The New York Daily News.

A lawyer for Mr. Merkin, Andrew Levander, said, “We will fully cooperate with any investigation by the New York attorney general’s office.”

Mr. Merkin, in letters to investors in his three investment funds — Ascot, Ariel and Gabriel — has portrayed himself as a victim of Mr. Madoff. He wrote that he was “shocked” by the Madoff fraud and that he, too, had lost millions.

Investors in Mr. Merkin’s Ascot fund lost $1.8 billion; the entire fund had been invested with Mr. Madoff. Mr. Merkin’s two other funds had part of their assets invested with Mr. Madoff, and these losses are in the hundreds of millions of dollars.

Many institutions that lost money through Mr. Merkin were ones in which he played a prominent role, often sitting on boards and offering financial advice. Among the institutions receiving subpoenas, according to the person with knowledge of the case, are New York University, New York Law School, Yeshiva University, the Levy Economic Institute at Bard College and the Ramaz School, which Mr. Merkin’s four children attend.

Tufts University, which is considering litigation, lost $20 million. New York University is suing over the lost of $24 million, and New York Law School has filed suit over a $3 million loss. Yeshiva University has said that it lost $110 million invested with Mr. Merkin, and Bard College, where Mr. Merkin sat on a college board, estimates its loss at $11 million.

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