Miami firms come to aid of victims in wake of Madoff Ponzi scheme
By Risa Polansky
As investors nationwide scramble to assess the fallout of money manager Bernard Madoff's alleged $50 billion Ponzi scheme, some local law and accounting firms are forming practice groups to aid area victims.
"A number of different clients approached us asking for help," said John M. Hogan, a partner in law firm Holland & Knight's Miami office and chair of the firm's new Madoff Advisory Group. "There really are a variety of legal problems that Madoff has caused."
Investors are also reaching out to accountants in hopes of recouping lost funds.
"Immediately we saw the need to help people recover some of their lost money from this horrible situation," said Miguel G. Farra, partner-in-charge of Brickell-based accounting firm Morrison, Brown, Argiz & Farra's Tax and Accounting Department.
Mr. Madoff, a Wall Street veteran and former NASDAQ chairman who split his time between Manhattan and Palm Beach, was arrested this month and charged with securities fraud — one of the biggest scams of its kind, with investor losses estimated at $50 billion.
Holland & Knight's new interdisciplinary Madoff Advisory Group, made up of attorneys in Florida, New York, Massachusetts and Washington, DC, is working to help clients navigate what experts expect will be a lengthy recovery process.
"We're finding that there are a number of our clients who received other people's money to invest, and they in turn invested it with banks, insurance companies and hedge funds and others, and eventually the money ended up in the Madoff companies," Mr. Hogan said. "Those people are trying to recoup the money they lost while at the same time have concerns that the people who gave them the money may try to hold them responsible."
To untangle the web, it will take legal expertise in several different areas: regulatory issues, securities litigation and tax law, among others, he said.
Mr. Hogan is a former prosecutor and chief of staff to Janet Reno during her tenure as US attorney general. He now chairs Holland & Knight's South Florida Litigation Practice Group and co-chairs the firm's White Collar Criminal Defense Team.
Other attorneys in the now-five-person Madoff Advisory Group have experience in finance, government investigations, securities regulation and civil litigation.
Mr. Hogan said he expects to add to the team.
Because of the high volume of inquiries the firm is receiving, "we need more help."
Morrison, Brown, Argiz & Farra has gathered its tax experts to advise the many clients that have turned to the firm in hopes of recovering money lost to the scam.
"The law always provides certain remedies," Mr. Farra said.
Madoff task force members can help investors who received fabricated financial statements by amending old tax returns to reclaim taxes paid on money that didn't exist.
It could take some time to identify fraudulent reports, and there is a three-year statute of limitations on tax returns, Mr. Farra warned.
But if potential victims act quickly, accountants can file protective claims notifying the Internal Revenue Service the client may have received inaccurate information.