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Madoff's own lawyer was a client of alleged Ponzi scheme

NEW YORK (Bloomberg) — Ira Lee Sorkin, the lawyer representing suspected Ponzi-scheme mastermind Bernard Madoff, was a customer of Madoff's investment advisory business before his client's arrest for allegedly running a $50 billion fraud, according to court papers.

Sorkin's name was among thousands on a 162-page list of individuals and entities considered "customers" of Madoff within a year before the New York investment adviser's arrest on December 11, according to a filing yesterday in US Bankruptcy Court in Manhattan. The list included New York Mets chief executive officer Fred Wilpon and his close friend, baseball great Sandy Koufax.

"I cannot and will not discuss investors then or now with Madoff," Sorkin said yesterday in a phone interview. Sorkin's parents, Nathan and Rosalie, who died in 2001 and 2007 respectively, were also Madoff customers, the list shows.

The filing was compiled by Dallas-based AlixPartners LLP on behalf of Irving Picard, the trustee tasked with liquidating Madoff's firm, Bernard L. Madoff Investment Securities LLC, whose assets were frozen following Madoff's arrest.

The list includes those who were notified by Picard about their possible rights in the case following an examination of Madoff's books, as well names as people who left voicemails on Picard's hotline or sent e-mail to his firm, court records show.

Also included on the list are former New York Public Advocate Mark Green, US Democratic Senator Frank Lautenberg of New Jersey, talk-show host Larry King, actor John Malkovich and New York developer Larry Silverstein.

Attorneys Mel Weiss and David Bershad were also listed as Madoff clients. Weiss is serving a 2 ½-year term for paying clients illegal kickbacks in August 2008 and Bershad in October received a six-month sentence after pleading guilty to paying kickbacks.

"Mr. Weiss is like dozens of other very sophisticated, intelligent, smart people who were unfortunately deceived by Mr. Madoff, who always presented as a scrupulously honest investment adviser," Weiss's lawyer Ben Brafman said in a phone interview yesterday. Brafman said Weiss was "stunned and disappointed" when he learned of the alleged fraud.

Bershad attorney Cristina Arguedas didn't immediately return a call seeking comment.

Madoff, 70, was charged by federal prosecutors with securities fraud after allegedly confessing to investigators that he directed the Ponzi scheme, which paid off early investors with money from later participants. Madoff hasn't formally responded to the charge. He faces as many as 20 years in prison if convicted.

Picard said yesterday he recovered about $946.4 million in cash and securities for customers of the bankrupt firm. Picard, with the firm Baker Hostetler LLP, said he retrieved $111.4 million in cash from various banks and institutions, on top of about $535 million from Bank of New York Mellon Corp. and JPMorgan Chase & Co.

Picard also got $300 million in securities that will be liquidated, he said. Creditors of the brokerage can file claims until July 2, though customers should file claim forms before March 4, according to the trustee's website. Picard mailed more than 8,000 claim forms on January 2.

The list didn't include how much money, if any, each customer lost. It included names of customers sent mail or e-mail to the Securities Investor Protection Corp., which is overseeing the bankruptcy.

Banks or companies on the list include Banco Santander SA, Bank of America Corp.'s Private Bank unit, Bank of New York Mellon Corp., Credit Suisse, BNP Paribas SA, Banak Medici, Bank of Bermuda Ltd., Cablevision Systems Corp. and Cigna Corp. unit Connecticut General Life Insurance.

Also on the list are Access International Advisors, Fairfield Greenwich Group Dexia SA and the estate of lawyer Howard Squadron. New York University Hospital for Joint Diseases, Brandeis University, Columbia University and the JEHT Foundation were also clients.