NEW YORK - For two years, the two sons of jailed financier Bernard Madoff portrayed themselves as honest whistleblowers of their father's historic fraud. A court-appointed trustee depicted them as bungling money managers who did nothing to protect investors.
Mark Madoff's suicide leaves questions for investors seeking payback for the billions of dollars his father siphoned - and for criminal investigators who continued to pursue charging Madoff's family for knowing participation in the fraud.
The 46-year-old Madoff - Bernard Madoff's elder son - hanged himself Saturday by a dog leash on a metal ceiling beam in his Manhattan loft apartment, his 2-year-old son asleep in another room. The medical examiner yesterday officially ruled the death a suicide by hanging.
He died on the anniversary of his father's arrest two years ago in the largest Ponzi scheme ever recorded. It followed the filing in recent weeks of dozens of lawsuits by trustee Irving Picard as he pursued billions of dollars in damages against those who profited from the multidecade fraud.
Increasingly, Picard has stepped up his language in lawsuits against those who knew Madoff well, describing an Austrian banker accused in a lawsuit Friday of being Madoff's "criminal soul mate" in her efforts on behalf of Madoff's fraud.
Last Wednesday, he included the brothers as defendants in an $80 million lawsuit he brought against the London-based international arm of Madoff's business, saying the overseas operation was used to siphon off money from the fraud for the Madoff family.
Picard said that for executives in the Madoff business, "pretending things do not exist - or looking away - may have been a well-honed survival strategy." Picard sought $200 million from Madoff family members in his lawsuit, which charged that family used the Madoff business like a "piggy bank", spending tens of millions on lavish homes and luxuries.
Mark Madoff and his brother, Andrew, portrayed themselves as heroes who sought to stop their father from committing more fraud.
A person who had recent contact with Mark Madoff, speaking on condition of anonymity because of the sensitivity of the case, said yesterday that Andrew Madoff, a cancer survivor, has occupied himself by helping his fiancee in a business venture. "He's been doing much better than his brother," over the past two years, the person said of Andrew Madoff.
A criminal investigation is still active against the family. Authorities want to know whether Madoff family members knowingly participated in the fraud. At a minimum, authorities believe they might be able to build a tax-fraud case, alleging that Madoff family members failed to fully report all of the income they received directly and indirectly from the family business.
But law-enforcement officials said yesterday that they had had no direct contact with either of the brothers or with Bernard Madoff's brother, Peter, in the last year, and said no charges were imminent.
Bernard Madoff's brother, Peter, was derided in court papers by Picard for his work at Madoff's firm as the chief compliance officer.
Picard said Peter Madoff was paid more than $23 million between 2001 and 2008 in salary, bonuses and other compensation. He said he also withdrew more than $16 million in fictitious profits from accounts under his control that were the result of "blatant backdating of transactions." A message left yesterday with a lawyer for Peter Madoff was not immediately returned.
Mark Madoff had worked with his father at the company since 1986, while Andrew had been there since 1988. Shana Madoff, the lawyer daughter of Peter Madoff, had worked there since 1995 as compliance counsel and in-house counsel, the court papers said.
Bernard Madoff is serving a 150-year prison sentence in a North Carolina prison. He admitted having told his clients in November 2008 that $20 billion in investments had grown to more than $65 billion when only several hundred million dollars remained.