Investor With Madoff Is Found Dead

Investor With Madoff Is Found Dead in His Pool

By DIANA B. HENRIQUES

The New York Times, October 25, 2009

Jeffry M. Picower, a prominent philanthropist accused of reaping about $7 billion in profit from Bernard L. Madoff’s vast Ponzi scheme, was found dead on Sunday afternoon in a swimming pool at his mansion in Palm Beach, Fla.

Lucien Capehart/Getty Images

Jeffry Picower, a well-known Wall Street investor, with his wife, Barbara. The two were prominent philanthropists.

Document: Palm Beach Police Statement on Picower Death

In the last year, Mr. Picower’s life had become a tangle of litigation arising from his disputed role in the Ponzi scheme operated by Mr. Madoff, who was arrested in December and pleaded guilty in March to operating a long-running fraud that cost thousands of victims billions of dollars.

The cause of Mr. Picower’s death is being investigated. According to a statement from the Palm Beach police, emergency personnel responded at 12:09 p.m. on Sunday to a call from Mr. Picower’s wife, Barbara. She said that she had found her husband at the bottom of the pool at the family home, an oceanfront property on South Ocean Boulevard. He could not be revived and was pronounced dead at 1:30 p.m. at Good Samaritan Medical Center in West Palm Beach.

An autopsy has been ordered to confirm the cause of death. William D. Zabel, a family lawyer, said that Mr. Picower, who was 67, had a history of “cardiac issues” and had Parkinson’s disease.

Mr. Picower was a well-known Wall Street investor and, with his wife, was also a prominent philanthropist. They established the Picower Institute for Learning and Memory at the Massachusetts Institute of Technology in 2002, and their own charity, the Picower Foundation, had been contributing to education, medical research and human rights initiatives since 1989.

Initially, the Picowers were notable as victims of the Madoff fraud. Indeed, the Picower Foundation was forced to close its doors in December because its entire endowment had been entrusted to Mr. Madoff.

On May 12, the bankruptcy trustee seeking assets for Madoff victims sued the Picowers in federal court to recover at least $6 billion they withdrew from their Madoff accounts over the years.

The lawsuit claimed that the Picower accounts with the Madoff firm were “riddled with blatant and obvious fraud” that a finance professional like Mr. Picower should have detected immediately.

It further asserted that he “knew or should have known” that the large and unusually reliable profits they withdrew from their Madoff accounts could only have been the product of a fraud.

The trustee, Irving H. Picard, had claimed in a court filing that Mr. Picower was having trouble getting his money back from Mr. Madoff at least as early as September 2003 and, on several occasions, was able to retrieve only “a fraction of the amount” he had requested from Mr. Madoff.

That failure to pay should have put Mr. Picower on notice that Mr. Madoff’s money-management business was a fraud, Mr. Picard asserted.

He also claimed that one Picower account with Mr. Madoff was overdrawn by $6 billion when Mr. Madoff was arrested in December. That amount was “clear evidence something was seriously amiss,” the trustee’s filing continued, because “no legitimate broker-dealer would allow this investor to maintain such a staggering margin balance.”

The Picowers have emphatically denied any knowledge of the Ponzi scheme, and Mr. Zabel has said they, along with other investors and regulators, were deceived by Mr. Madoff.

Recently, the Picowers acknowledged that the scandal and its aftermath had become a punishing experience, both emotionally and physically.

“We always have been private people, and having all this play out in the media has taken a big toll on our health,” the couple wrote in response to questions submitted earlier this month by The New York Times.

“We feel stunned, betrayed, angry, sickened, devastated,” they continued. They coped, they said, by drawing strength “from each other and from the knowledge that we did nothing wrong.”

Mr. Zabel has previously said that the Picowers had initiated settlement discussions with the trustee “to avoid years of extensive litigation.”

Mr. Zabel said on Sunday evening that the talks were continuing and “progress was being made” when he last spoke with Mr. Picower on Friday.

Mr. Picard acknowledged meeting with the Picowers’ lawyer but declined to comment further on any settlement talks.

Mr. Picard has also sued others, including Stanley Chais, a Los Angeles investment manager whose clients lost millions in the fraud. Mr. Picard asserts that he too should have been suspicious of the fraud when the trades that Mr. Madoff’s firm provided in financial statements did not correspond to daily market transactions.