The Work

February 5, 2009 10:58 AM

Mel Weiss, Other Former Milberg Partners Snared in Madoff Scam

Posted by Nate Raymond

As if Melvyn Weiss and David Bershad didn't have enough troubles these days, documents released Wednesday reveal that the two convicted Milberg Weiss partners were customers of Bernard Madoff.

Weiss and Bershad's names appear on a 162-page list (download) of customers of Bernard L. Madoff Investment Securities LLC. Patricia Hynes, another former name partner of Milberg Weiss who now practices at Allen & Overy, also appears on the list as a customer of Madoff, who allegedly ran a $50 billion Ponzi scheme since the 1970s.

Weiss's lawyer, Benjamin Brafman in New York, confirmed Weiss was one of Madoff's victims.

"Mel Weiss, like many dozens of other very sophisticated and highly successful people, unfortunately believed that Bernard Madoff was a scrupulously honest, legitimate investment adviser who was also involved in very impressive philanthropic activities," Brafman says. "Mr. Weiss and many others are now bitterly disappointed to learn that they have apparently been victims of a fraud.

"But to fool people like Mel Weiss, Mort Zuckerman, and [Mets owner] Fred Wilpon suggests that Madoff was truly a 'master' at his craft."

Brafman says it would "not be appropriate" to discuss how much Weiss lost. Bershad's lawyer, Robert Luskin of Patton Boggs, says his client has no comment. Hynes did not return a call seeking comment.

In June, Weiss was sentenced to 30 months in prison. Under his plea deal, he agreed to forfeit $9.75 million and pay a fine of $250,000. Bershad was sentenced in October to six months in prison. He forfeited $7.75 million and was fined $250,000.

Hynes, a former name partner, left Milberg in 2006 after the firm was indicted for paying kickbacks to name plaintiffs to file class action lawsuits. Milberg LLP settled with the government for $75 million in June.

The list of Madoff customers was prepared by AlixPartners L.P., which was hired by the bankruptcy trustee as claims agent. It does not say how much money the former Milberg partners or others may have lost following the collapse of Madoff's company. Like other customers on the list, the trio would have had open accounts with Madoff sometime last year, and were mailed claim forms last month.

It's not just the Milberg attorneys who are listed as customers. Howard Vogel, the Englewood, New Jersey-based broker who received kickbacks from Milberg Weiss to serve as a name plaintiff, also is listed as a customer. So too is his retirement fund, which was used as the name plaintiff in some litigation by Milberg.

Vogel's lawyer, Miller & Chevalier partner Marc Rochon, did not return a call for comment.

Ironically, the lawyers' former firm, now named Milberg LLP, has been one of the most active plaintiff's firms in rounding up Madoff victims for litigation. It has more than 100 victims already signed up, a spokeswoman says.

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