More than 140 former Madoff clients are sued over fake profits

A group of at least 140 of Bernard Madoff's former investors, including Thomas H. Lee, were sued by a court-appointed trustee seeking to recover fictitious profits they received in the six years before the con man's firm filed for bankruptcy in December 2008. The trustee, New York attorney Irving Picard, sued Blue Star Investors LLC and Lee, individually, for $19.7 million in U.S. Bankruptcy Court in Manhattan today. Picard is trying to recover money from people who withdrew more than they invested in their Madoff accounts. The money was recorded as profit on their accounts. Picard claims the fictitious profits are “other people's money.” Lee didn't immediately return a phone message seeking comment. Picard has filed more than 180 so-called clawback suits today and on Nov. 26, claiming fictitious profits withdrawn over the last six years. He faces a deadline of Dec. 11 to file any additional clawback suits. Of the at least 40 defendants sued on Nov. 26, according to Picard, all were former employees of Bernard L. Madoff Investment Securities LLC or are relatives of Madoff or his wife, Ruth Madoff. Madoff, 72, is serving 150 years in prison after pleading guilty to orchestrating the fraud that destroyed his New York- based firm, which collapsed in December 2008. At the time of his arrest, Madoff's financial statements reflected 4,900 accounts with $65 billion in nonexistent investments, according to Picard. Investors lost about $20 billion in principal. The bankruptcy case is SIPC v. Bernard L. Madoff Investment Securities LLC, 08-1789, U.S. Bankruptcy Court, Southern District of New York (Manhattan). Bloomberg