The state Attorney General’s Office on Monday defended its lawsuit to recover $1.2 billion from a hedge fund operator who invested with Bernard L. Madoff, the jailed mastermind of the largest Ponzi scheme in history. The motion to dismiss the state’s fraud suit filed in July by the hedge fund operator, J. Ezra Merkin, should be “rejected out of hand,” the state’s lawyers said in their opposing papers. Mr. Merkin claimed the state’s suit should be thrown out because his investors were advised in required disclosure documents that he might place their money with outside managers, such as Mr. Madoff, without their “consent” or “notice” (NYLJ, July 7). The fact that Mr. Merkin had the right to use “sub-managers,” the state’s memorandum of law contended, “did not give him the right to conceal Madoff’s role and thereby mislead investors into believing that Merkin, and he alone, was managing the funds.” The state’s responsive papers, however, halved the amount of losses from the $2.4 billion that its complaint stated Mr. Merkin had caused his clients (NYLJ, April 7). The attorney general’s office did not respond to a request for comment. - Daniel Wise
Former Judge Stole Funds From Court, Cuomo Charges
A former upstate town judge is accused of using $27,000 in court fees and bail money on four separate occasions to pay taxes and utility bills at his restaurant and stave off foreclosure on his home.
