Whistleblower News: Purdue Pharma, Madoff Investor
Madoff Investor Merkin Agrees to Pay Victims $280 Million
Almost a decade after Bernard Madoff’s Ponzi scheme collapsed, the trustee unwinding his fraud struck another settlement with one of the con man’s earliest investors -- a $280 million deal with the hedge-fund operator and philanthropist J. Ezra Merkin.
The accord, announced Wednesday, allows Merkin to avoid what would have been the first major trial in a lawsuit by the trustee since the unraveling of Madoff’s fraud in 2008 wiped out $17.5 billion in principal for thousands of investors.
Merkin, who met Madoff in the 1980s and socialized with the financier, ran so-called feeder funds that directed investor cash into Madoff’s bogus investment firm. Some of his clients, including New York University, later said they had no idea their money ended up with Madoff. Yeshiva University, a modern Orthodox Jewish institution, invested with Madoff through Merkin and lost about $100 million. Madoff and Merkin both sat on the school’s board.
The trustee, New York bankruptcy lawyer Irving Picard, has long claimed that Merkin turned a "blind eye" to the fraud to profit from the regular returns Madoff provided. Merkin has said he was simply another a victim of a sophisticated scam.
Picard’s lawsuits against Madoff’s biggest investors and other parties tied to the scam have recovered more than $12.9 billion, or about 74 percent of the lost principal.
The settlement with Merkin resolves claims against him and two funds, Ascot Partners LP and Ascot Fund Ltd., as well as his management company, Gabriel Capital Corp. A hearing to approve the deal is set for July 10 in federal bankruptcy court in Manhattan. read more »
Mass. Attorney General Maura Healey sues opioid maker Purdue Pharma
Attorney General Maura T. Healey sued OxyContin maker Purdue Pharma on Tuesday, alleging the company and its executives knowingly engaged in a “unconscionable” scheme to mislead doctors and consumers about the deadly dangers of its opioids.
She asserts that the privately held company and 16 of its key directors and executives actively obfuscated the truth about opioid use, downplaying the perils of addiction and overdoses with the aim of getting more people to take them at higher doses for longer periods of time in order to boost the business’s bottom line.
“Purdue Pharma created the epidemic and profited from it through a web of illegal deceit,” the lawsuit alleges.
In a statement Tuesday, Purdue denied the allegations against it.
While several other state attorneys general have taken similar legal action against Purdue, Healey’s action Tuesday opens a new front in the battle against the scourge of overdoses in Massachusetts. And the suit, filed in Suffolk Superior Court, hints the state could be seeking damages to the tune of billions of dollars. read more »
JPMorgan is sued over Mexican property transfer
A Mexican real estate developer has filed a $1.2 billion lawsuit accusing JPMorgan Chase & Co of fraudulently inducing it to transfer properties based on a false promise it would sell them.
The complaint by Elias Sacal Cababie and his BVG World SA was filed with the U.S. District Court in Manhattan on Monday, the same day BVG said a Mexican judge had issued an arrest warrant for JPMorgan’s country head, Eduardo Cepeda, for alleged fraud related to a 2007 loan.
In a emailed statement on Tuesday, JPMorgan said the allegations of wrongdoing in the complaint had no merit, and added: “This is all part of a process by Mr. Sacal aimed at avoiding fulfillment of financial obligations.”
The bank had on Monday said the accusations related to Cepeda also had no merit, and that it was working with its lawyers “to respond to this demand for justice to be served.” read more »
