Trustee Sues Madoff Insider, Says He Must Have Known

LA money manager got rich on fake returns
By Kevin Spak,  Newser Staff
Posted May 2, 2009 11:09 AM CDT
The building in midtown Manhattan in New York where Bernard Madoff and wife Ruth live in a penthouse apartment is seen in this aerial view on Sunday, March 22, 2009.   (AP Photo/Mark Lennihan)
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(Newser) – A trustee overseeing the liquidation of Bernie Madoff's assets filed a lawsuit against one of the Ponzi schemer’s investors yesterday, accusing investment manager Stanley Chais of getting such “implausibly high” returns that he should have known they were a sham. Chais and his family withdrew “untold” funds from their Madoff accounts, including $1 billion since 1995, the New York Times reports.

The trustee also accused Chais of raking in money from false tax losses on those Madoff accounts. A lawyer for Chais said he was “saddened” by the suit. “Mr. Chais and his family have suffered astounding and ruinous losses from the Madoff scheme,” he said. The lawsuit seeks to recover the money paid to Chais and use it to compensate other Madoff victims.