...It now appears that the biggest winner in Madoff's scheme may not have been Madoff at all, but a secretive businessman named Jeffry Picower.
Between December 1995 and December 2008, Picower and his family withdrew from their various Madoff accounts $5.1 billion more than they invested with the self-confessed swindler, according to a lawsuit filed by the trustee who is trying to recover money for those Madoff defrauded.
In contrast, shortly after he confessed, Madoff declared his household net worth to be between $823 million and $826 million, according to court documents. While the Madoffs clearly lived opulently, no evidence has emerged that their combined assets and expenditures approached the amount the Picower family is alleged to have withdrawn from the scheme.
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Above all, what was the exact relationship between the two men? The complaint is larded with the legal catch-all phrase, "knew or should have known," to describe Picower's cognizance of Madoff's fraud, but the intricacies of the relationship are left to the imagination. The complaint states that the Picowers were beneficiaries of the Ponzi scheme for more than 20 years. The withdrawals listed between 1995 and 2008 reveal a pattern of large quarterly disbursements, transferred to Picower-controlled accounts by check or sometimes wire, that peak in 2003. Three years later something happens that causes the amount to drop precipitously. It recovers slightly the following year, but the highest-flying days are over for good.
