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Picard vs Irwin and Eric Lipkin and family

Picard vs Irwin and Eric Lipkin and family

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Published by mrspanstreppon
Picard's $9 million lawsuit against two former Madoff employees, Irwin Lipken and his son, Eric.Describes phony account statements and forged SEC docs.
Picard's $9 million lawsuit against two former Madoff employees, Irwin Lipken and his son, Eric.Describes phony account statements and forged SEC docs.

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Published by: mrspanstreppon on Dec 11, 2010
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11/09/2011

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Baker & Hostetler LLP
45 Rockefeller Plaza New York, NY 10111Telephone: (212) 589-4200Facsimile: (212) 589-4201David J. SheehanKeith R. MurphyGeraldine E. Ponto
 Attorneys for Irving H. Picard, Esq., Trustee for the Substantively Consolidated SIPA Liquidationof Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff 
UNITED STATES BANKRUPTCY COURTSOUTHERN DISTRICT OF NEW YORK 
SECURITIES INVESTOR PROTECTIONCORPORATION,Plaintiff-Applicant,v.BERNARD L. MADOFF INVESTMENTSECURITIES LLC,Defendant.Adv. Pro. No. 08-01789 (BRL)SIPA LIQUIDATION(Substantively Consolidated)In re:BERNARD L. MADOFF,Debtor.IRVING H. PICARD, Trustee for the Liquidationof Bernard L. Madoff Investment Securities LLC,Plaintiff,v.IRWIN LIPKIN, CAROLE LIPKIN, ERICLIPKIN, ERIKA LIPKIN, individually, and in her capacity as Custodian UGMA/NJ for Charlotte AvaLipkin [C.L.], Devon Sabrina Lipkin [D.L.], andSydney Addison Lipkin [S.L.], CHARLOTTEAVA LIPKIN [C.L.], by and through Erika Lipkin,Adv. Pro. No. 10-_______ (BRL)
 
-2- parent and Custodian, DEVON SABRINA LIPKIN[D.L.], by and through Erika Lipkin, parent andCustodian, SYDNEY ADDISON LIPKIN [S.L.], by and through Erika Lipkin, parent and Custodian,MARC LIPKIN, RUSSELL LIPKIN, and KARENYOKOMIZO LIPKIN,Defendants.
COMPLAINT
Irving H. Picard, Esq. (the “Trustee”), as trustee for the liquidation of the business of Bernard L. Madoff Investment Securities LLC (“BLMIS”), under the Securities Investor Protection Act, 15 U.S.C. §§ 78aaa,
et seq
. (“SIPA”)
1
, and the substantively consolidated estateof Bernard L. Madoff individually, by and through his undersigned counsel, for his Complaint,states as follows:
NATURE OF PROCEEDING
1.This adversary proceeding arises from the massive Ponzi scheme perpetrated byBernard L. Madoff (“Madoff”). Over the course of the scheme, there were more than 8,000client accounts at BLMIS. In early December 2008, BLMIS generated client account statementsfor its approximately 4,900 open client accounts. When added together, these statements purportedly show that clients of BLMIS had approximately $65 billion invested with BLMIS. Inreality, BLMIS had assets on hand worth a small fraction of that amount. On March 12, 2009,Madoff admitted to the fraudulent scheme and pled guilty to 11 felony counts, and was sentencedon June 29, 2009 to 150 years in prison. The within Defendants Irwin Lipkin, Carole Lipkin,Marc Lipkin, Russell Lipkin, Karen Yokomizo Lipkin, Eric Lipkin, Erika Lipkin, individuallyand in her capacity as parent and Custodian UGMA/NJ for defendants C.L., D.L., and S.L. ( all,collectively “Defendants” or “Lipkin Defendants”) received avoidable transfers from BLMIS
 
-3-under circumstances in which they, or the Lipkin family members acting on their behalf, knew oshould have known of the fraud.2.On information and belief, Defendants Irwin Lipkin and his son Eric Lipkin werelong-time, trusted employees in Madoff’s inner circle and complicit participants in Madoff’sfraud. The other Defendants are family members of Irwin and Eric Lipkin, and as such weresubstantial direct and indirect beneficiaries of the fraud, including the funds received from theinvestment advisory accounts (“IA Accounts”) in their own names as well as the salary and IAAccount withdrawals received by Irwin and Eric.3.Irwin Lipkin (“Irwin”) was one of the very first employees at BLMIS, hired byMadoff as early as 1964. Over the course of his decades of employment at BLMIS, Irwin helpedoversee the growth of BLMIS from a two-man operation in 1964 to a business with billions of dollars of customer money purportedly under management. Irwin considered himself to be likefamily to Madoff, and over the years, Irwin served as the Controller in Madoff’s inner circle of core employees. As Controller, Irwin was responsible for the internal books and records of BLMIS, including the investment advisory business (“IA Business”). Among other duties, heassisted Madoff in conducting monthly reviews of the customer accounts and performing internalaudits of the purported security positions held by BLMIS. The IA Business was involved infictitious trading activity during Irwin’s tenure. As the Controller responsible for overseeing theIA Business, Irwin Lipkin played a central role in facilitating the illusion of legitimacy.4.Irwin’s son, Defendant Eric Lipkin (“Eric”), joined BLMIS in 1992 and wasemployed at the company up through the Filing Date in December 2008. During his sixteen-year tenure at BLMIS, Eric served as Madoff’s lieutenant, the company’s payroll manager,administered the 401K plan and, like his father, assisted in the operation and concealment of the
1
For convenience, future reference to SIPA will not include “15 U.S.C.”

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