Fairfield Greenwich Group co-founder Walter Noel was sued by the trustee overseeing the liquidation of Bernard Madoff’s firm as part of an amended lawsuit that names 43 new defendants.
Mr. Noel and the other defendants worked with Mr. Madoff and his firm “to commit, and exponentially expand, the single largest financial fraud in history,” trustee Irving Picard said Wednesday in the complaint filed in U.S. Bankruptcy Court in New York. “Every dollar the defendants purportedly ‘earned,’ and every dollar they kept to unjustly enrich themselves, was stolen money.”
Mr. Madoff is serving a 150-year term in federal prison in Butner, N.C., after pleading guilty to orchestrating history’s biggest Ponzi scheme. Fairfield Greenwich was a marketing and investor-relations arm for Bernard L. Madoff Investment Securities, helping to enable the scheme, Mr. Picard said.
Mr. Picard is seeking more than $3.6 billion in damages from the Fairfield Greenwich defendants.
Thomas Mulligan, a Fairfield Greenwich spokesman, read from a company statement saying the decision to expand the lawsuit was “incomprehensible” because the company is involved in good-faith negotiations with Mr. Picard.
“The Madoff trustee’s amended complaint is replete with false, misleading and rehashed accusations,” Fairfield Greenwich said in the statement.
Mr. Picard in May 2009 sued three Fairfield Greenwich “feeder funds” that channeled $4.7 billion to Madoff Investment Securities and withdrew billions from the firm. On Wednesday, Mr. Picard added 24 Fairfield Greenwich units and 19 people who held management positions at the firm or marketed the feeder funds. He claims the feeder funds no longer have most of the money they got from Madoff.
Mr. Picard claimed Mr. Noel, a founding partner and director of Fairfield Greenwich, and the other individual defendants made millions of dollars by ignoring red flags and helping Mr. Madoff accomplish his fraud.
“Noel and his immediate and extended family became exceptionally wealthy due to FGG’s de facto partnership with Madoff,” Picard said.
Fairfield Greenwich co-founding partners Jeffrey Tucker and Andres Piedrahita were among the other individuals added to the case by Mr. Picard.