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Friday, October 9, 2009

Madoff Chaos: Top U.S. Prosecutor Forced off Case Over Conflict

Madoff Chaos: Top U.S. Prosecutor Forced off Case Over Conflict
New Prosecutor's Father is Lawyer for Potential Target of Investigation
ABC NEWS by BRIAN ROSS and JOSEPH RHEE - October 9, 2009

Just days after being appointed, the new chief of the criminal division in the U.S. Attorney's office in Manhattan, Richard B. Zabel, has taken himself off the biggest case his office is handling, the investigation of the Bernard Madoff Ponzi scheme, because his father represents one of the potential targets. "He has recused himself from any involvement in the Madoff case," a spokesperson for the U.S. Attorney's office, Rebekah Carmichael, told Friday. Zabel's appointment was announced Tuesday. The spokeswoman declined to provide any details about who would oversee and supervise the Madoff investigation. Madoff. Zabel's father, William Zabel, represents financier Jeffrey Picower who bankruptcy trustee lawyers have alleged was complicit in the Ponzi scheme. In court documents, trustee lawyers allege Picower was the "biggest beneficiary of Madoff's scheme," clearing more than $7.2 billion. The trustee alleged the money was "a form of compensation by Madoff to Picower for perpetuating the Ponzi scheme." The U.S. Attorney's office declined to say whether Picower was considered a target of the criminal investigation. The elder Zabel said his son's decision to take himself off the Madoff case "is entirely appropriate, because of the appearance of a conflict of interest." On behalf of his client, the elder Zabel has denied Picower played any role in the Madoff scheme. "The Trustee's villainous portrayal of Mr. Picower is unsupported by facts," Zabel said in a recent court filing.

Madoff Scheme Investigation Setback

Lawyers familiar with the case said the decision by the younger Zabel is yet another setback in the government's investigation and prosecution of others involved in the Madoff scheme. "They have been dragging their feet and have not shown an appetite for going after others who may have helped Madoff devise the scheme," said one lawyer working on the case. Madoff's right-hand man, Frank DiPascali, pleaded guilty to fraud charges in August and initially agreed to cooperate with the government. But lawyers say after the judge in the case refused to allow DePascali to stay free on bail, his willingness to help as much as he could was in question. DiPascali's lawyer, Marc Mukasey, did not immediately return calls seeking comment. Mukasey's role in the Madoff case created an earlier conflict of interest and prosecutorial recusal. His father, Michael Mukasey, was attorney general in the Bush administration and was forced to recuse himself because of his son's representation of DiPascali. Madoff is serving a 150-year sentence in federal prison and criminal fraud charges are pending against Madoff's accountant. Lawyers in the case say another set of indictments had been expected shortly after Labor Day but they have been held up as a new prosecutorial team settles in to the U.S. Attorney's office in Manhattan.


shocked said...

Oh my god. Could this be a hint of a return of ethics to the sorry state of new york?

Anonymous said...

This is highly unusual. And a welcomed event!

Anonymous said...

In a town filled with thousands of highly skilled lawyers and dozens of prominent white collar defense lawyers, the two conflicts here are suspect and help fan the belief, perception and the realty of corruption in the New York Courts. Imagine if this was not a high profile case what kind of conflicts and other acts that would be allowed. In a crime that shatters all records for economic theft and duration unless you believe these are the Keystone Cops these conflicts are just not coincidences. Case in point a delay of trial enures to benefit of one party over the other, often to the detriment of someone else. As a result these conflicts are not damage or injure free. We must keep and eye on the case.

Anonymous said...

I say the explosion of internet blogs and this blog in particular has the corrupt trying to figure out how to remain corrupt without being the target of complete exposure..personal and work related!

The intenet has circumventd the media outlets in outing everyone about anything they see is untoward, criminal or unethical.

This had not been afforded us ever...and the slimy NY state courts are about to be exposed.... showing their tactics that are worse than what any criminal syndicate employs....for all of the world to see.

America's largest justice system operates and has operated for decades..... in the vein of the darkest elements that they claim to punish....all with the complicity of the silent media!

OCA is feeling the heat...and they cannot call the editors of the STOP or control any of it...the iternet is the best invention of our time.

It will gather and inform the masses and the massess will take control of this country from all the greedy lawyers and court systems that have destroyed our peaceful existence!

Anonymous said...

Bill Zabel is a well known dirty divorce lawyer and rain maker at his firm. The high profile nature of this case forced this action. Ethics and Conflicts mean nothing to these "lawyers."

Anonymous said...

Who protected Madoff? Who could call and stop an investigation at SEC? Schumer?

Eliot Bernstein said...

Hokus Pokus here and all roads lead to Iviewit. Gravel free @

the green hornet said...

The cover-up of Bernie Madoff continues, the Zabel disclosure is a speed bump on this road.

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