J. Ezra Merkin’s Clients To Get $405 Million Settlement In Madoff Fraud

Merkin put $2 billion of his clients’ money in the care of Bernard Madoff, and deceiving investors by concealing Madoff’s role in managing their money. Merkin did that in part by releasing misleading documents, including quarterly reports.

J. Ezra Merkin

J. Ezra Merkin’s Clients To Get $405 Million Settlement In Madoff Fraud
Shmarya Rosenberg • FailedMessiah.com

Clients of disgraced hedge fund manager J. Ezra Merkin will receive $405 million in a settlement orchestrated by New York State’s Attorney General Eric Schneiderman and announced today.

Merkin put $2 billion of his clients’ money in the care of Bernard Madoff, and deceiving investors by concealing Madoff’s role in managing their money. Merkin did that in part by releasing misleading documents, including quarterly reports.

Madoff pleaded guilty in 2008 to masterminding a long-running Ponzi scheme that was the largest in US history. More than $65 billion he claimed to have on hand for investors had dwindled to a few hundred million dollars. Merkin was one of his major sources of new investors.

Today’s settlement will also award $5 million to New York state to cover the cost of administering the settlement itself.

Merkin is a great-great grandson of Rabbi Samson Raphael Hirsch. His father Hermann was a major philanthropist and businessman who was a leader of the Modern Orthodox community in Manhattan. His sister Daphne is a novelist and critic who once wrote for Commentary Magazine.

Merkin’s victims include New York Law School, Bard College, Harlem Children's Zone, Homes for the Homeless and the Metropolitan Council on Jewish Poverty.

Many other victims asked not to be identified.

"Many New Yorkers entrusted their investments to Mr. Merkin, who then steered the money to Madoff while receiving millions of dollars in management and incentive fees," Schneiderman told the press today. "By holding Mr. Merkin accountable, this settlement will help bring justice for the people and institutions that lost millions of dollars."

Investors will get more than 40 percent of their losses up to $5 million, MSNBC reported. Those who had greater losses might get more than $5 million, if the number of victimized investors who seek reimbursement is low enough.

Terms of the settlement will be shared with investors over the coming days.

Merkin, a Modern Orthodox Jew who was a pillar of his East Side community and synagogue, used his extensive contacts to raise more than $4 billion from investors, many of which were charities or non-profits – including, for example, Yeshiva University and the Metropolitan Council on Jewish Poverty.

Madoff is serving a 150-year prison sentence in Butner, N.C.

Merkin has not faced criminal charges.

[Hat Tip: Seymour.]

Comments

[Nigritude Ultramarine]

mer·kin
An artificial covering of hair for the pubic area

[WoolSilkCotton, rock star and sports superstar]

150 years? Perfect.

[Dan Barzel]

Shmarya, you normally profess to have an admirable sense of obligation to adherence to the truth, particularly when it comes to the Haredim. So why do you mention that Daphne Merkin once wrote for Commentary (not that that's a bad thing; to the contrary; it's a great thing)? It's not difficult to confirm that for decades she's written primarily for the New Yorker and not once for Commentary. So why did you say that? Are you adopting the dishonest tactics you accuse the Haredim of using?

[Jeff]

Merkin has not faced criminal charges.

Why?

[Nigritude Ultramarine]

"It's not difficult to confirm that for decades she's written primarily for the New Yorker and not once for Commentary."

It's not difficult to confirm that "she published her first literary criticism in Commentary and the New Leader, ..."

Contemporary Jewish-American Novelists: A Bio-Critical Sourcebook
By Joel Shatzky, Michael Taub

[Nigritude Ultramarine]

Works by Daphne Merkin

"Why Potok Is Popular." Commentary, February 1976, 73-75.
"Looking Back." Commentary, July 1977, 63-65.

[Rebitzman]

@Jeff

Because evidence suggests he too was a victim.

[Shmarya]

Shmarya, you normally profess to have an admirable sense of obligation to adherence to the truth, particularly when it comes to the Haredim. So why do you mention that Daphne Merkin once wrote for Commentary (not that that's a bad thing; to the contrary; it's a great thing)? It's not difficult to confirm that for decades she's written primarily for the New Yorker and not once for Commentary. So why did you say that? Are you adopting the dishonest tactics you accuse the Haredim of using?

Posted by: Dan Barzel | June 24, 2012 at 06:25 PM

Commentary is Jewish, the NYer isn't.

[Isa]

There was someone in my old shul in Minneapolis that tried to entice me to invest my retirement funds with him. Spectacular interest or something like that he said.

I wonder if he invested with Madoff

[Rocky]

Isa, I have read that a number of machers at the Fifth Avenue Synagogue in New York, where Merkin WAS shul president, did take the bait and in total lost over $1 billion. I wonder if Merkin will have to sell his co-op at 740 Park Avenue as part of the restitution process. Once upon a time, John D. Rockefeller lived in the building.

[transparency]

I think Ezra Merkin was Reuven Feinstein's Havruta for many years - "birds of a feather" and all that.......

[No Light]

NU - I choked on my drink when. I read the title. I can't believe someone is unfortunate enough to be called that.

I wonder, did his mother go by Ima Merkin? :-D

[John Nagle, Silicon Valley, CA]

Oh, Merkin and Madoff. As one writer put it, Merkin was either in on it or "really stupid". Merkin had a law degree from Harvard, so "really stupid" seems unlikely.

There were three main Madoff front men who brought in money. Merkin handled the New York City crowd, using his position as head of the Fifth Avenue Synagogue. Jeffry Picower suckered in the Palm Beach crowd. Stanley Chais handled the LA crowd.

Picower and Chais are dead. Madoff is in jail. Merkin still has various lawsuits pending. Picower's heirs are desperately trying to keep the bankruptcy trustee from "clawing back" $5 billion in profits. They've lost in every court, and are trying to appeal to the Supreme Court, which probably won't help them.

[Abracadabra]

Didn't Picower's widow voluntarily settle with the trustee for Madoff's funds?

[Nigritude Ultramarine]

I wonder, did his mother go by Ima Merkin? :-D

Posted by: No Light | June 24, 2012 at 11:40 PM
Anita Merkin

[Jeff]

Posted by: John Nagle, Silicon Valley, CA | June 25, 2012 at 12:43 AM

There was also Bob Jaffe in Boston, who I believe was active in Palm Beach as well. Boston has a relatively small Jewish community, but it's a disproportionately affluent one.

(Actually, "community" is a euphemistic term; it's barely cohesive enough to be called one.)

[shlomo yomtob]

Why are great majority of financial fraud committed by jewish people?

[5th Avenue]

Ok so Ezra is not the most honest guy around

But Scotty Shmarya Rosenberg was sued in court as a deadbeat and is a bad write off because he does have more than a pot to pish in to recover from ... That makes him a disgraced blogger / wannabe journalist

His grandfather was a mafia don

According to Z Atlas his victims include Ethiopians who never received funds misappropriated from a charity he controlled

HYPOCRITE!!!

[5th Avenue]

Shlomo, Allen Stanford doesn't look very Jewish

[5th Avenue]

John Nagle, you ignoramus.

Are you really that clueless? The WASPy feeder funds in CT were huge. And there was that French guy who committed suicide

[5th Avenue]

Doubtful Reuven Feinstein

More likely his neighbor Norman Lamm

[Jeff]

Posted by: 5th Avenue | June 25, 2012 at 07:15 AM

Looks like someone's been getting his information from the heimishe version of Fox News.

[5th Avenue]

It must drive you Commie Pinkos nuts that Fox Newshas the most viewed programs

[Jeff]

It must drive you Commie Pinkos nuts that Fox Newshas the most viewed programs

Yes, just as Haredim are having the most children. You people consistently confuse quantity with quality. You may want to talk to your rebbe about that.

[5th Avenue]

Yes and the rate you are going with your secular 1.5 kids who intermarry + 2 dogs, the Charedim will still be around in a few generations while you won't

[Yochanan Lavie]

Chareidim won't be around, at least not in the form we know them. That's because their economic model is as sustainable as a Ponzi Scheme.

BTW: A "merkin" is a pubic wig.

[5th Avenue]

Well unless Shmarya clones himself or donates his seed to an Ethiopian sperm bank you'll never know if Yochanan is right or wrong

[Jeff]

Well unless Shmarya clones himself or donates his seed to an Ethiopian sperm bank you'll never know if Yochanan is right or wrong

It's getting harder and harder for me to figure out what the hell it is you people are trying to say.

[Office of the Chief Rabbi]

Commentary is Jewish, the NYer isn't.

Posted by: Shmarya | June 24, 2012 at 08:27 PM

Lenny Bruce taught that if you live in New York or any other big city, you are Jewish.

He probably would add counterbalance that with "if you live in the mid-west, you're goyish."

[Yochanan Lavie]

http://www.myjewishlearning.com/culture/2/Humor/History/In_America/WizardsofWit/A_Humor_Perspective/jewishandgoyish.shtml

[Office of the Chief Rabbi]

@YL Thanks. Butte. Pleased to see that Reform Judaism Magazine was the source of knowledge.

[wandering jew]

The madoff debt trades at .50. This deal is a bad deal for his investors. He may even turn around and get paid from trustee picard double this amount he settled for.