Madoff's money had to come from somewhere. Enter feeder funds. Among the money managers turned defendants:
J. Ezra Merkin (left)
Last April, New York State Attorney General Andrew Cuomo filed a civil lawsuit against J. Ezra Merkin, alleging that the money manager (who had a reputation as a philanthropist) had swindled his fee-paying clients, deceitfully channeling their money to Madoff. Investorswhich included nonprofitslost more than a billion dollars as a result. Merkin's request that the lawsuit be dismissed was denied by a New York judge in February.
Walter Noel/Fairfield Greenwich Group
Walter Noel's Fairfield Greenwich Group (FGG) was the largest feeder fund investing with Madoff, sending billions of clients' dollars his way. It's been hit with several lawsuits. In April, Massachusetts securities regulators brought civil fraud charges against FGG. They settled in September, neither admitting nor denying the charges but agreeing to pay some $8 million to various Massachusetts investors.
Sonja Kohn/Bank Medici
Madoff-related losses were not restricted to the U.S. The month after Madoff's arrest, the Austrian government assumed control of Bank Medici. It was sued, along with the bank's chair Sonja Kohn, by Repex Ventures SA, a company in the British Virgin Islands, which alleged investors were not made aware of the channeling of funds to Madoff. The company has given up its banking license and changed its name to 20.20 Medici AG. Kohn, who is under investigation, has said she is nothing more than a victim in the Madoff scandal.