In 2003, a research company met with J. Ezra Merkin, a prominent Wall Street financier who had earned a fortune investing his clients’ money with Bernie Madoff.
He warned the unnamed company never to 'go long in a big way' with Madoff. He joked that 'Charles Ponzi would lose out because it would be called the ‘Madoff scheme,’' according to notes from the meeting.
Some new details came from a phone call Merkin recorded during the fall of 2005, between himself and Madoff.
After a different Ponzi scheme came to light involving the Bayou Group, a hedge fund firm in Stamford, Conn., Merkin told Madoff that this would further stoke suspicions about his business.
The lawsuit seeks at least $560m, an amount that the trustee said Merkin’s funds withdrew from Madoff accounts before the Ponzi scheme was revealed. Merkin has not been charged with any criminal wrongdoing.
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