State obtains $410M settlement with Madoff associate
Attorney General Eric T. Schneiderman yesterday announced he secured a $410 million settlement with J. Ezra Merkin, who controlled four funds that invested over $2 billion with Bernard M. Madoff on behalf of hundreds of investors, including many New Yorkers and charitable organizations.
As a result of Madoff’s Ponzi scheme, the investors in the funds, Ariel Fund Ltd., Gabriel Capital L.P., Ascot Fund Ltd. and Ascot Partners L.P., whose assets were largely handled by Madoff, lost in excess of $1.2 billion, while Merkin received hundreds of millions of dollars in management fees.
Under the agreement, Merkin will pay $405 million to compensate investors over a three-year period, and $5 million to the state of New York to cover fees and costs. This is the first settlement resulting from a government action against Merkin.