Strange

Madoff Fraud Victim Launches Divorce Settlement Lawsuit

by Tina Kells | February 9, 2009 at 04:48 pm

534 views | 1 Recommendation | 2 comments

Just when you thought that the Bernie Madoff drama couldn't get any juicier a story breaks that proves you wrong. It seems that the Madoff Ponzi Scheme is being cited in a petition before the New York Family Court to reverse the terms of a divorce settlement.

Steven Simkin, a New York lawyer, has asked the courts to force his ex-wife Laura Blank to return part of the divorce settlement she received in 2004 saying that the courts had inaccurate information about his net worth due to his holdings with Bernard L. Madoff Investment Securities. He says that if the courts fail to grant his petition his wife will unfairly profit from the Madoff Ponzi Scheme.

New York has hinted that some or all of the Madoff investors may be asked to return profits that they made through the years. Should Simkin be ordered to return his profits he would have to pay on behalf of himself and his ex-wife while she would get to keep her shares of the illegal gains.

Steven Simkin and Laura Blank held $5.4 million in a Madoff account, according to a statement provided by Bernard L. Madoff Investment Securities at the time of the couple's separation in 2004, the lawsuit filed in New York State Supreme Court said.

Simkin paid Blank, his wife of 30 years, half as part of their uncontested divorce settlement, the lawsuit said. That meant she avoided losses caused by Madoff's alleged fraud.

"Unknown to Steven and Laura, the 'account,' whose valuation was critical to the parties' agreement, was a sham and fiction," the lawsuit said.

"Laura obtained a windfall and Steven did not receive an equitable share of the couple's joint assets ... It is only fair and equitable for Laura to shoulder some of that harm."

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caj1

at 22:59 on February 9th, 2009

Yeah, this is a great story...I read The New York Times story about this couple's now contested divorce settlement (contested by the ex-husband who lost the money which he had kept invested with Bernard Madoff Investments) whereas his ex-wife got "real" money as per the terms of the original divorce settlement.

penop (not verified)

at 13:05 on March 5th, 2009

He could have taken his money out but he choose to stay with Madoff and take the dividends. What good are divorce agreements if they can be overturned years later