ByEllen Tumposky, Ellen Tumposky
2 min read
ByEllen Tumposky, Ellen Tumposky
Jewish organisations ranging from major players to small non-profits will be forced to give up millions of dollars as a result of "clawback" lawsuits filed by the trustee representing the victims of fraudster Bernard Madoff.
While Hadassah was never sued by Irving Picard, the trustee who this month unleashed a barrage of clawback actions, it announced earlier this month that it had agreed to pay back $45 million.
This sum, agreed after lengthy negotiations with Mr Picard, was slightly less than half of the profits Hadassah had made from investing with Madoff since 1988.
"As painful as it is, this settlement is in the best interest of Hadassah," the letter from National President Nancy Falchuk announcing the settlement said.
Ms Falchuk said the deal allowed the organisation "to put this chapter behind us" and added that Hadassah's "fiscal discipline" would allow it to pay back the money while continuing to earmark all donations for their intended purpose.
Hadassah has agreed to pay $45 million to a victim fund
Smaller non-profits like the America-Israel Cultural Foundation (AICF) - which supports young Israeli artists - may find it tougher to make a deal with Mr Picard and still carry out their mission. Mr Picard is seeking more than $5 million from AICF.
In a statement, the organisation called the clawback suit "unfortunate", protesting that AICF - which believed it had $13 million in its account with Madoff - "was and remains a victim of the fraud".
Administrator Shiri Golani said the foundation has for three generations "taken care of Israel's soul", funding cutting-edge artists, providing scholarships, workshop support and travel grants. It is vowing to continue providing those services.
The fate of the American Jewish Congress, which reported last year that it had lost $21 million of its $24 million endowment in the Madoff fraud, remains unclear. The organisation is in talks with Mr Picard, according to their lawyer.
Other Jewish organisations hit by clawback suits include the American Committee for Shaare Zedek Medical Centre in Jerusalem and the Miles and Shirley Fiterman Charitable Foundation, according to the Chronicle of Philanthropy.
Yeshiva University had investments worth more than $100 million with Madoff but has not been sued.
Madoff victims received a huge infusion of cash last week from the estate of prominent Jewish philanthropist Jeffrey Picower, who drowned in his swimming pool last year. His widow, Barbara, agreed to turn over the entire $7.2 billion she and her husband had withdrawn from their Madoff accounts. The Picower foundation contributed to the Massachussetts Institute of Technology and to Harvard University.
Grandmother faces $19 billion 'clawback' lawsuit
Madoff trustee Irving Picard's biggest "clawback" suit this month was filed against an Austrian grandmother. Sonja Kohn, 62, who founded Bank Medici, a private Viennese bank, was this month named in a suit that seeks to recover $19.6 billion. Kohn is charged with conspiring to steer about $9 billion into Madoff's investment funds through an elaborate system of European feeder funds. She has allegedly characterised herself as Austria's woman on Wall Street. Kohn was born in Vienna and in the 1980s lived in Monsey, an Orthodox Jewish stronghold north of New York, while working as a stockbroker on Wall Street. Her lawyer, Andreas Theiss, says his client is a victim, not a villain.