Aspen-area Madoff victims suing U.S. government | AspenTimes.com

Aspen-area Madoff victims suing U.S. government

Rick CarrollThe Aspen TimesAspen, CO Colorado

Bernard Madoff returns to his Manhattan apartment after making a court appearance in 2008 in New York. Jason DeCrow/AP file

ASPEN – At least four Aspen-area victims of disgraced money manager Bernie Madoff are suing the U.S. government on allegations that it allowed the financial scam to carry on despite numerous warning signs over the years.Combined, the four victims have filed separate lawsuits seeking more than $47 million in damages.The most recent suit, filed Dec. 9 in the U.S. District Court of New York, alleges that Aspen Fine Arts Co., an investment entity controlled by Aspen resident Melvin Knyper, was fleeced out of $19.8 million by Madoff. Madoff’s Ponzi scheme, the suit says, was “due to the gross negligence of the United States Securities and Exchange Commission,” which “during the past 16 years … was given copious opportunities to stop Madoff’s fraud” and “failed to recognize any of the smoking guns provided to the SEC by credible third parties and industry experts.”Aspen Fine Arts opened a corporate account in the mid-1990s with Madoff, as well as two pension accounts, the suit alleges. Knyper declined to comment Wednesday, as did Stephen Goldenberg, who filed a similar suit Nov. 15. Goldenberg’s suit seeks at least $6.3 million in damages.”The SEC, through its negligent actions and inactions, allowed Madoff’s Ponzi scheme to continue and flourish, ultimately resulting in billions of dollars lost, including Mr. Goldenberg’s $6,327,521.86,” the Aspen resident’s suit says. Likewise, Basalt resident Ed Calesa filed suit Nov. 24, seeking damages of more than $11.5 million.”The SEC owed a duty of care to all Madoff investors, including Mr. Calesa,” the suit says, adding that “when Madoff’s scheme collapsed, Mr. Calesa discovered that he had lost $11,575,969.46 of his retirement and savings.” Calesa opened up an account with Madoff in 1997, according to the suit. The fourth local resident, Gary Albert of Aspen, filed suit Nov. 15, claiming that he’s owed at least $9.4 million.”Madoff’s Ponzi scheme was able to continue to swindle funds from investors, including Mr. Albert, due to the SEC’s negligence and ineptitude,” alleges the suit. Albert opened up an individual account, a family retirement account and an account in the name of the toy company he owned, the suit says. The suits were filed in the U.S. District Court of New York by Lax & Neville LLP, a Manhattan-based law firm that is representing dozens of Madoff victims against the SEC. “Based upon the Inspector General’s Report [concerning the SEC’s Madoff probe], we believe that a viable claim exists against the SEC,” the firm’s website says. In February 2009, the list of Madoff’s victims became public as part of court documents released in U.S. Bankruptcy Court in Manhattan. Among Aspen, Basalt and Snowmass, there were at least 30 Madoff victims with local addresses.Madoff, 72, is serving a 150-year term at a medium-security, federal penitentiary in Butner, N.C. His Ponzi scheme is estimated to have cheated investors out of more than $65 billion, though actual losses have been estimated to be $18 billion, based on a court-appointed trustee’s calculations. He was arrested Dec. 11, 2008; nearly two weeks ago, on the two-year anniversary of Madoff’s arrest, one of his sons, Mark, committed suicide. Meanwhile, the four local victims’ suits offer nearly identical allegations, including that as far back as 1992, the SEC “bungled” opportunities “that would have derailed Madoff’s Ponzi scheme…”And despite at least four SEC formal investigations into Madoff’s operation – called Bernard L. Madoff Investment Securities LLC, which was founded in 1960 – the organization “negligently disregarded its own policy which mandates that ‘all relevant information contained in tips and complaints must be sufficiently vetted …'””If the SEC upheld the duty of care it owed to all Madoff investors, many of Madoff’s victims would have not suffered the devastating losses that ultimately resulted,” the suit says.rcarroll@aspentimes.com