Madoff Trustee Says Charity Investors Might Have to Return Gains

The liquidator for Bernard Madoff’s investment firm said charities that profited from the disgraced financier’s Ponzi scheme will not be exempt from efforts to recoup investors’ losses, even if they did not know their gains were the fruit of fraud, Bloomberg reports.

“We will look at charities on a case-by-case basis before determining what action may be appropriate,” said the trustee, Irving Picard, in a statement on Monday.

So-called clawback suits may seek money from investors who withdrew more than they invested with Mr. Madoff, who counted many large charitable funds among his clients. So far Mr. Picard has sued only investors he says knew or should have known that their gains were tainted, including the philanthropists Jeffry Picower and Stanley Chais.

Both men have shut down their foundations, saying they suffered heavy losses from Mr. Madoff’s con, and both have denied any wrongdoing.