Madoff Associate Kohn Has $42 Million Frozen by U.K. Judge
December 03, 2011, 12:49 PM ESTBy Kit Chellel
(Updates with comment from lawyer in fourth paragraph.)
Dec. 2 (Bloomberg) -- A London judge froze 27 million pounds ($42 million) of Sonja Kohn’s assets and ordered the former business partner of Bernard Madoff to move funds to the U.K. as the administrators of Madoff’s European operation seek recoveries for victims of his fraud.
Judge Julian Flaux said Kohn should repatriate as much of the 27 million pounds as possible to the U.K. within 56 days, adding it may be at risk as a result of “the nature of the wrongful conduct which is alleged against her.”
The former chairwoman of Bank Medici AG, according to a prior ruling from Flaux, made at least $56 million introducing clients to Madoff, who pleaded guilty in 2009 to using money from new investors to pay off old ones in a Ponzi scheme, sparking investigations and dozens of lawsuits. He is serving 150 years in prison in North Carolina for the fraud that caused his New York-based firm to collapse in December 2008.
“This freezing order is a routine measure for such cases under English procedures and it is actually a good result in light of the entire case,” her lawyer, Clemens Trauttenberg, said by phone from Vienna.
Liquidators of Madoff’s estate are pursuing Kohn and the directors of Madoff Securities International Ltd., the company’s English unit, for the return of assets.
‘Positive Legal Position’
Kohn, who is suffering from health problems, has a house in Switzerland and fund investments worth at least 15 million pounds as well as bank accounts as far away as Israel, lawyers said today.
“We are very positive about her legal position in the merits of the case and expect that the basis of this claim will fail ultimately, as a matter of law and the case will be dismissed,” said her lawyer Trauttenberg, who previously has called Kohn a victim of Madoff’s fraud.
Kohn, 63, met Madoff in the 1980s and introduced him to investors who invested billions of dollars with him. She is accused of billing Madoff companies for research, analysis and consulting services while in reality the payments were “secret kickbacks” for introducing money into the scheme, according to the Nov. 25 court ruling freezing her assets.
Steve Akers, one of the administrators of Madoff Securities International, declined to comment.
The case is Madoff Securities International Ltd. v. Stephen Ernest John Raven, 10-1468, High Court of Justice, Queen’s Bench Division (London)
--With assistance from Zoe Schneeweiss in Vienna. Editors: Christopher Scinta, Anthony Aarons
To contact the reporter on this story: Kit Chellel in London cchellel@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net
