Madoff Victims Want to Freeze Assets of His Relatives, Business Associates

Only one person has gone to jail so far in Bernard Madoff's massive stock fraud: Madoff himself. But that hasn't stopped prosecutors, regulators and victims from going after others who got gloriously rich off his scheme.

A series of court actions in recent weeks have sought to freeze the assets of Madoff's relatives and key business associates, including lavish Park Avenue apartments, Hamptons mansions and art collections.

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The lawsuits are still in their earliest stages, but already judges have shown a willingness to bar the defendants from selling off homes or emptying bank accounts while the legal disputes play out.

Some of the luxury properties and playthings at stake are eye-popping.

After he was sued by New York's attorney general this week, hedge fund manager J. Ezra Merkin, whose clients thought they had more than $2 billion with Madoff, agreed not to sell personal assets that include an art trove and one of the city's most expensive apartments.

Merkin's 18-room duplex at 740 Park Avenue is reportedly furnished with at least $91 million worth of paintings by the abstract expressionist Mark Rothko. The co-op was the subject of a book by society author Michael Gross that dubbed it "the world's richest apartment building."

The building itself is so exclusive, it once turned down Barbra Streisand as a tenant. Past residents have included billionaire philanthropist John D. Rockefeller Jr., financier Ronald O. Perelman, and automaker founder Walter Chrysler. Former Merrill Lynch CEO John Thain bought his apartment there for $27.5 million.

Investors who collectively shelled out $450 million in fees and commissions to Merkin say he should now lose it all.

"It would be my hope that whatever assets he has will be taken from him and distributed to the people who invested in his fund," said Mortimer Zuckerman, a real estate magnate and publisher who gave Madoff $40 million to invest, including money in his charitable foundation.

Merkin isn't the only hedge fund manager in a fight to keep his fortune.

A judge in Connecticut issued a temporary restraining order late last month freezing the assets of top executives at Fairfield Greenwich Group, another "feeder fund" that reaped hundreds of millions of dollars in fees marketing investments with Madoff.

The court order covers the extensive, exotic real-estate holdings of the family behind the fund. The holdings are believed to include the hilltop villa called "Yemanja" that Fairfield Greenwich co-founder Walter Noel built several years ago on the private Caribbean island of Mustique, where the family's neighbors include Tommy Hilfiger.

The Noels also have homes in Connecticut, Manhattan and the Hamptons. Noel's managing partner and son-in-law, Andres Piedrahita, has mansions in London and Madrid and a getaway on the island of Mallorca, off the Spanish coast.

The same Connecticut judge also froze the personal assets of the managers of two other hedge funds with ties to Madoff, as well as the bank accounts and real estate holdings of Madoff's wife, brother and two sons.

The order is a temp and its focus on individuals rather than companies.

Also, Madoff's tendency to use personal friends and acquaintances to do his business, rather than big banks, accounting firms and brokerage houses, has left fewer deep pockets to tap.

The growing list of civil suits are expected to take years to resolve.