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Ex-Madoff customers seek swindler's personal assets
Breaking Legal News | 2009/04/02 07:56
Some of jailed swindler Bernard Madoff's defrauded customers moved on Wednesday to try and get access to his personal assets and any other items that may have been transferred to his family or other people.


Papers filed in U.S. District Court in Manhattan in the civil case against Madoff, 70, asked a judge to include personal assets among those of his firm being gathered under the auspices of a bankruptcy court to pay back fraud victims.

A court-appointed trustee is winding down Bernard L. Madoff Investment Securities LLC to find assets to sell to return money to thousands of his former customers. But there is no trustee of personal assets of the man who pleaded guilty on March 12 to running Wall Street's biggest investment fraud.

"The recovery of Madoff's assets which may have been been transferred to family members or third parties may be more easily recovered in a bankruptcy proceeding for Madoff himself, rather than less directly in the bankruptcy case of the Madoff securities firm," said Jonathan Landers, a lawyer for scores of Madoff customers represented by Milberg LLP and Seeger Weiss LLP, which filed the request.



Vick to make first court appearance in bankruptcy
Bankruptcy | 2009/04/02 06:57
A judge wants to know more about suspended NFL star Michael Vick's bankruptcy plan, which is based on his goal of resuming his football career when he gets out of jail.


Vick is scheduled to make his first personal appearance in a Virginia bankruptcy court since filing his Chapter 11 case from prison.

Vick must testify at the hearing, which begins Thursday in Newport News. The former Atlanta Falcons quarterback is serving a 23-month sentence for bankrolling a dogfighting ring. He's due to be released in July.

His plan would allow him to keep the first $750,000 of his salary. Creditors would get part of any additional earnings.

Earlier this week Vick agreed to pay the Falcons at least $6.5 million, moving closer to cutting ties with a team that doesn't want him.



Wash. man convicted in fellow student's murder
Criminal Law | 2009/04/02 04:57
A 20-year-old man who had been diagnosed as a paranoid schizophrenic was convicted Wednesday in the fatal shooting of a fellow high school student.


Douglas S. Chanthabouly had been charged with first-degree murder but a Pierce County Superior Court jury convicted him of second-degree murder. He had pleaded not guilty by reason of insanity.

Chanthabouly faces about 15 to 30 years in prison for the shooting of Samnang Kok, 17, in a hallway at Foss High School on Jan. 3, 2007. If he had been acquitted by reason of insanity, he would have been committed indefinitely to a state mental institution. Sentencing was set for May 1.

"We're disappointed and expect that we'll be filing an appeal," court-appointed defense lawyer John A. McNeish said, declining to specify grounds for an appeal.

Prosecutor Ed Murphy said he did not know the split among jurors on the charge of first-degree murder, which requires a finding of premeditation.

"I think it was a difficult issue for the jury," Murphy said.

During the trial, witnesses testified that Chanthabouly pointed a handgun at Kok and fired a shot into his face and two more rounds into his body from no more than a foot away.



Summary of Supreme Court actions Wednesday
Legal Business | 2009/04/02 04:56

_ Ruled for employers who want to force unionized workers to pursue their age discrimination claims through arbitration instead of a federal lawsuit. The court, in a 5-4 decision, said an arbitration agreement negotiated between an employer and a union that strips them of their option to take complaints to court is binding on workers. The dissenting justices said the high court in the past ruled that unions cannot bargain away employees' federal forum rights in discrimination cases.


_ Said the federal government should pay federally appointed lawyers for working on state clemency requests for death row inmates. The 6th U.S. Circuit Court of Appeals in Cincinnati had said that the law does not allow federal public defenders to be paid for working on state clemency requests. The high court disagreed and reversed that decision on a 7-2 vote.

_ Ruled that the government may consider cost in deciding whether to order power plants to undertake environmental upgrades that would protect fish. The 2nd U.S. Circuit Court of Appeals in New York said that the Clean Water Act does not allow cost to be used when deciding what technology would best minimize environmental impacts. But Justice Antonin Scalia, writing for a 6-3 majority, said even the appeals court and environmentalists "concede that some form of cost-benefit analysis is permitted."



Judge freezes assets of Madoff sons, executives
Court Watch | 2009/04/02 01:56
A judge froze the assets of disgraced Wall Street legend Bernard Madoff's two sons and five executives who ran hedge fund portfolios that funneled money into his Ponzi scheme.


The order by Connecticut Superior Court Judge Arthur Hiller, issued Monday and made public Tuesday, prohibits them from selling homes or moving money, and marks the first time their assets have been frozen.

"This is an important step," said David Golub, a lawyer representing the town of Fairfield, Connecticut, in a lawsuit against Madoff and the so-called feeder funds run by Tremont Group Holdings, Maxam Capital Management and Fairfield Greenwich Group.

The town's pension funds charged in a lawsuit that the funds "knew -- or willfully refused to know -- that Madoff's investment returns were not actually produced by his purported split-strike conversion strategy."

Separately, a judge in New York denied an appeal by Madoff's brother, Peter, to lift a freeze on his assets in a civil lawsuit. Peter Madoff had reached an agreement with U.S. authorities in December on an asset freeze, according to court papers.



Mass regulator charges Madoff feeder fund
Securities | 2009/04/01 07:54

Massachusetts' top securities regulator charged hedge fund firm Fairfield Greenwich Group with fraud for allegedly lying to investors about confessed swindler Bernard Madoff's phony management business.

The action on Wednesday marks the first charges against one of Madoff's feeder funds, which funneled billions of dollars into the disgraced Wall Street legend's long-running Ponzi scheme.

William Galvin, Massachusetts' secretary of state, accused Fairfield Greenwich, a prominent hedge fund firm in Connecticut, of failing to check how Madoff generated the strong and steady returns he said he made year after year.

"The allegations against Fairfield in this complaint outline a total disregard for such (fiduciary) responsibility which helped the Madoff scheme to stay afloat for so long," Galvin said in a statement.

Galvin wants Fairfield Greenwich to return the money that Massachusetts investors lost in the scheme and return the performance fees they paid the firm. He is also seeking an administrative fine against Fairfield.

Fairfield Greenwich's Sentry Funds had placed about $7.2 billion, or 95 percent of its assets, with Madoff, whose fraud appears to have totaled about $65 billion.



Appeals court rejects tax case of McVeigh's lawyer
Tax | 2009/03/31 09:33
An appeals court affirmed Timothy McVeigh's lawyer cannot claim a charitable tax deduction for donating prosecution materials from the Oklahoma City bombing case.


The three-judge panel of the 10th Circuit Court of Appeals on Friday upheld a tax court ruling that threw out the deduction claimed by Stephen Jones for material he collected as lead defense counsel in McVeigh's trial for the 1995 bombing that killed 168 people.

Jones told The Associated Press on Monday that the courts agreed the value of the gift is not deductible, but the appellate court rejected what Jones characterized as "ill-tempered language" in the tax court's opinion of his case.

Jones said the Internal Revenue Service treated him and his wife, Sherrel, with "a cavalier, condescending, unprofessional attitude and behavior from beginning to end."

He said he asked that the agency's Oklahoma City office be disqualified from the case because some IRS workers there had experienced losses in the bombing, which injured hundreds of people and damaged areas of downtown.

A spokesman for the IRS in Dallas, Clay Sanford, declined comment on the case because of federal disclosure regulations that prohibit public discussion of individual tax matters.

An appraiser hired by Jones valued the materials at $294,877, and Jones and his wife claimed a tax deduction for that amount. He said he received the deduction for four years before the IRS rejected it and sent Jones a notice of tax deficiency for $14,785.

In upholding the tax court ruling, the Denver-based appellate court said the size of the deduction Jones could claim was limited to the amount he had paid or invested, which was none.

Jones gave the prosecution and defense materials to the University of Texas, which he attended as an undergraduate. The archive includes transcripts, FBI reports, correspondence, videotapes and other materials.



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