Madoff's Brother Subject of Criminal Probe

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    NEWSLETTERS

    TK
    AP
    Peter Madoff exits Mineola State Supreme Court, Friday, April 3, 2009, in New York. The former chief compliance officer of Bernard Madoff investment Securities LLC and brother of Bernard is now facing his own probe. (AP Photo/ Louis Lanzano)

    A lawyer for the brother of Ponzi king Bernard Madoff said in court papers made public Wednesday that his client has been told he is a "subject" of criminal investigators probing the multibillion-dollar fraud.

    Charles Spada said in the filing in Newark federal court that Manhattan federal prosecutors have said Peter Madoff is a "subject'' of their wide-ranging probe and his "career, assets, and family all are under intense scrutiny."

    Spada disclosed the probe as he explained why his client refused to answer questions at a deposition in a lawsuit brought by a charitable foundation of New Jersey Sen. Frank R. Lautenberg. He said Madoff had ``a reasonable fear that his statements might be used against him in that investigation.''

    The foundation is seeking damages for money lost because of the fraud that Bernard Madoff revealed in December 2008. He is serving a 150-year prison sentence after pleading guilty in the fraud.

    Authorities also have prosecuted two of Madoff's firm's computer programmers and his longtime auditor.

    Peter Madoff was senior managing director and chief compliance officer at Bernard L. Madoff Securities LLC.

    In a civil lawsuit in New York, a court-appointed trustee, Irving Picard, is seeking $198.7 million from Peter Madoff, who had worked at Madoff's Manhattan investment company since 1965, and Bernard Madoff's sons, Mark and Andrew. Picard says the family used the business like a ``piggy bank.''

    In the New Jersey case, Ronald J. Riccio, a lawyer for the Lautenberg Foundation, has sought sanctions against Peter Madoff after he invoked the Fifth Amendment for most of the more than 290 questions posed to him over a three-hour period on Nov. 12.

    In a letter dated Tuesday but also filed publicly on Wednesday, Riccio said Madoff invoked the Fifth Amendment more than 250 times, including to the question of whether he understood his "obligations to obey court orders.''

    Riccio said: "For all intents and purposes, the defendant could have stayed home."

    Spada said his client acted reasonably.

    "Given the circumstances and intensity of the criminal investigation, one can hardly question defendant's constitutional right not to answer questions about his brother ... and virtually any related topic for fear that such answers might `furnish a link in the chain of evidence' for a criminal prosecution,'' Spada wrote.

    He added: "Although in many cases there may exist a category of close calls _ innocuous questions that a defendant otherwise invoking the Fifth Amendment might be able to answer without fear of incrimination _ this obviously is not such a case."

    Janice Oh, a spokeswoman for prosecutors in Manhattan, had no comment on Spada's filing.