(Updates with excerpt from filing in fourth paragraph.)
Oct. 24 (Bloomberg) -- An investor in a fund that channeled money into Bernard Madoff’s Ponzi scheme asked a New York court to confirm a $7.01 million arbitration award.
The investor, Moshael J. Straus, filed a petition in New York State Supreme Court in Manhattan on Oct. 22 seeking to confirm the award by the American Arbitration Association, according to court documents.
The arbitration relates in part to $5.1 million worth of investments Straus made in 1999 and 2002 as a limited partner in Ascot Partners LP, a hedge fund whose managing partner and general manager was J. Ezra Merkin, Straus said in the court documents.
“Unbeknownst to petitioner, and in breach of his duties, respondent did not manage these investments for petitioner but simply transmitted substantially all of Ascot over the years to Bernard L. Madoff Investment Securities LLC, thereby greatly facilitating Madoff’s Ponzi scheme,” Straus said in the petition.
Andrew Levander, an attorney who has represented Merkin in other Madoff cases, didn’t immediately return a phone message left at his office seeking comment on the petition.
Merkin, 58, who associated with Madoff in business and socially from at least the 1990s, “secretly” placed investors’ money with the confidence man in return for hundreds of millions of dollars in fees, according to lawsuits by investors and regulators.
The arbitrators found that Merkin “intentionally breached” his duties and that Straus didn’t know Ascot was a Madoff feeder fund even though many investors did, according to the court documents.
Straus is a New Jersey businessman and former attorney who serves as trustee at Yeshiva University in New York, according to the court documents.
Madoff, 73, is serving a 150-year term in federal prison in Butner, North Carolina, after pleading guilty to orchestrating history’s biggest Ponzi scheme. His investors lost about $20 billion in principal.
The case is Straus v. Merkin, 652910/2011, New York State Supreme Court (Manhattan).
--With assistance from Linda Sandler in New York. Editors: Andrew Dunn, Mary Romano
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