MADOFF MIDDLEMAN EZRA MERKIN CHARGED WITH FRAUD

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Attorney General Andrew M. Cuomo announced on 04/06/09 charges against J. Ezra Merkin and the funds he controlled for violating New York’s Martin Act by concealing from his clients the investment of more than $2.4 billion with Bernard L. Madoff. In a 54-page complaint filed in New York State Supreme Court, Cuomo alleges that investors, including several prominent charities and non-profits, entrusted their investments to Merkin, who then steered the money to Madoff without their permission, in exchange for $470 million in management and incentive fees.

The complaint also charges that Merkin ignored irregularities and other glaring red flags related to Madoff’s investments. As a result, hundreds of investors lost millions in investments, tragically including important charity organizations that were specifically targeted by Merkin. Attorney General Cuomo’s lawsuit seeks payment of damages and disgorgement of all fees by Merkin. The complaint also charges Merkin’s management company, Gabriel Capital Corporation (“GCC”). Merkin managed several funds, including Ascot Fund Limited, Gabriel Capital L.P., and Ariel Fund.

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