Jeffry Picower
Jeffry Picower | |
|---|---|
| Born | Jeffry M. Picower May 5, 1942 |
| Died | October 25, 2009 (aged 67) Palm Beach, Florida, U.S. |
| Occupation(s) | Investor, lawyer |
| Spouse | Barbara Picower |
Jeffry M. Picower (May 5, 1942– October 25, 2009)[1][2] was an American investor and noted philanthropist involved in the Madoff investment scandal. He appears to have been the largest beneficiary of Madoff's ponzi scheme, and his estate settled the claims against it for $7.2 billion.[3][4][5]
Business dealings
Picower was a certified public accountant and lawyer.[6] However, he appears to have made most of his sizable fortune by investing.[6] According to the Jewish newspaper The Forward, Picower was a donor to many Jewish charities during his career, giving away over 2 million dollars during 2007 alone.[7]
As an accountant at Laventhol & Horwath in the 1980s, Picower set up questionable tax shelters.[8] When the IRS challenged their validity, one of Picower's clients sued him and the firm.[8] The case was quietly settled out of court.[8]
In 1983, Picower was rebuked by the Securities and Exchange Commission for late disclosure of his greater than 5% position in a company involved in a merger.[8]
In 1991, Picower and Anthony Cerami established a charity, the Picower Institute for Medical Research,[8], with an initial endowment of $10 million.[9] Researchers there made a potentially valuable discovery, with possible applications in the treatment of rheumatoid arthritis, Crohn's disease, and multiple sclerosis.[10][11] It was spun off into a for-profit company, Cytokine Networks, which was later merged with privately-held PharmaSciences to form Cytokine PharmaSciences. However, it was revealed that Picower owned 76% of PharmaSciences stock and actually controlled 86.2%, putting him in a conflict of interest in the merger negotiations.[8]
After Physician Computer Network, Inc., went bankrupt, Picower, the chairman of the board and 45% shareholder, had to give $21 million to other shareholders in 2000[8] after it was discovered that company executives had falsified financial statements.[12]
Alaris Medical Systems, 65% owned by Picower, was taken over by Cardinal Health in 2004 for $1.6 billion.[13]
Picower was listed by Forbes magazine as one of the top 400 richest people in the United States for 2009,[14] his only time on the list. Forbes, which listed Picower at No. 371, placed his net worth at $1 billion, although the magazine acknowledged that the former lawyer and accountant is "likely worth billions more."[15][16]
Involvement with Bernard Madoff
The Jeffry M. and Barbara Picower Foundation was created in 1989 by Picower and his wife Barbara.[13] Barbara Picower was listed as Executive Director and trustee, with both Picowers being members of the board of directors.[17] Longtime friend Bernard Madoff managed foundation assets listed at over $1 billion.[13][18] It distributed over $268 million in grants to various American organizations, including Human Rights First and the New York Public Library.[13][18] In 2002, it granted $50 million to the Massachusetts Institute of Technology neuroscience research center, which was subsequently renamed the Picower Institute for Learning and Memory.[13][19] However, the Picower Foundation was forced to close in 2009 due to losses arising from the uncovering of Madoff's Ponzi scheme.[18]
In June 2009, Irving Picard, the trustee liquidating Madoff's assets, filed a lawsuit against Picower in the U.S. Bankruptcy Court for the Southern District of New York (Manhattan), seeking the return of $7.2 billion in profits, alleging that Picower and his wife knew or should have known that their rates of return were "implausibly high", with some accounts showing annual returns ranging from 120% to more than 550% from 1996 through 1998, and 950% in 1999.[20][21] According to a June 28, 2009, MSNBC article, that would make the Picowers the biggest beneficiaries of Madoff's scam, exceeding even Madoff himself.[6] The Picowers' lawyer, William D. Zabel of Schulte Roth & Zabel, responded that, "They were totally shocked by his fraud and were in no way complicit in it."[21]
On November 1, 2009, an additional court filing from the Madoff trustee documented an apparently fraudulent gain benefiting Picower. "According to the new filing, Mr. Picower opened an account with Mr. Madoff on April 18, 2006, by wiring a check for $125 million, more than a quarter of the entire sum he invested with Mr. Madoff over time. Within two weeks, the $125 million deposit had purportedly grown to $164 million because of a dramatic ‘gain’ on the securities held in the account—all of which supposedly had been purchased three months earlier ... Five months later, Mr. Picower withdrew his original $125 million, leaving $81 million in the account. There is no legitimate explanation for these events nor any possibility that they escaped Picower’s notice."[22]
On 17 December, 2010, it was announced that a settlement of $7.2 billion had been reached with the Picower estate to resolve the Madoff trustee suit, and repay losses in the Madoff fraud. No explanation has surfaced why Madoff essentially bequeathed so much money to Picower.[5]
Death
On October 25, 2009, Jeffry Picower was found at the bottom of the pool of his Palm Beach home and could not be revived. Picower's wife, Barbara, told dispatchers she found him "at the bottom of their swimming pool" at their oceanfront estate shortly after noon, Palm Beach police said. He was taken to Good Samaritan Hospital, where he was pronounced dead about 80 minutes later.[23]
According to the Palm Beach Police Department, "An autopsy of the body of Jeffry M. Picower was performed this morning. The Palm Beach County Medical Examiner's Office determined that Mr. Picower suffered a massive heart attack while in the swimming pool resulting in accidental drowning."[24]
He was buried on October 27, 2009, in Mount Ararat Cemetery in Farmingdale, New York.[25]
References
- ^ Susman, Carolyn (2009-09-25). "Palm Beach Police identify Jeffry M. Picower as drowning victim". palmbeachdailynews.com. Retrieved October 25, 2009.
- ^ "Madoff investor drowns in Florida pool". cnn.com. October 26, 2009.
- ^ Bernstein, Jake (June 28, 2009). [www.msnbc.msn.com/id/31510209/ns/business-small_business/ "Madoff may not have benefited most in scam Client Jeffry Picower allegedly withdrew $5.1 billion from accounts"]. Pro Publica. Retrieved December 18, 2010.
{{cite web}}: Check|url=value (help) - ^ Healy, Beth (December 18, 2010). "Picower estate adds $7.2b to Madoff fund". Boston Globe. Retrieved December 18, 2010.
{{cite news}}: Unknown parameter|coauthors=ignored (|author=suggested) (help) - ^ a b Aaron Smith (2010-12-17) Feds nab $7.2 billion for Madoff victims CNNMoney.com. Accessed 2010-12-18
- ^ a b c Bernstein, Jake (June 28, 2009). "Madoff may not have benefited most in scam". MSNBC. Retrieved July 2, 2009.
- ^ JTA, - (October 26, 2009). "Philanthropist Linked to Madoff Found Dead". Forward. Retrieved October 29, 2009.
{{cite web}}:|first=has numeric name (help) - ^ a b c d e f g McMenamin, Brigid (October 14, 2002). "Unaccountable". Forbes. Retrieved July 2, 2009.
- ^ Stevens, William K. (August 1, 1991). "Noted Scientist And Staff Leave Rockefeller U." New York Times. Retrieved July 2, 2009.
{{cite web}}: Italic or bold markup not allowed in:|publisher=(help) - ^ Jacoby, Mary (December 29, 2001). "Foundations' founder yet to donate $67-million". St. Petersburg Times.
{{cite web}}: Italic or bold markup not allowed in:|publisher=(help) - ^ Jacoby, Mary (July 8, 2001). "Complex web benefits foundation founder". St. Petersburg Times.
{{cite web}}: Italic or bold markup not allowed in:|publisher=(help) - ^ "Physician Computer Network, Inc". Stanford Law School Securities Class Action Clearinghouse. Retrieved July 2, 2009.
- ^ a b c d e Fabrikant, Geraldine (December 19, 2008). "Foundation That Relied on Madoff Fund Closes". New York Times. Retrieved July 2, 2009.
{{cite web}}: Italic or bold markup not allowed in:|publisher=(help) - ^ "The 400 Richest Americans 2009". Forbes.com. September 30, 2009. Retrieved December 18, 2010.
- ^ Rooney, Ben (September 30, 2009). "Super rich are $300 billion lighter". CNN Money. Retrieved September 30, 2009.
{{cite web}}: Italic or bold markup not allowed in:|publisher=(help) - ^ http://www.propublica.org/article/picowers-madoff-take-now-estimated-to-Be-7.2-billion-101
- ^ "Jeffry M. & Barbara Picower Foundation". BusinessWeek. Retrieved July 2, 2009.
- ^ a b c Weinraub, Mark (December 20, 2008). "Charity Picower says closes from Madoff losses". Reuters. Retrieved July 2, 2009.
- ^ "The Picower Institute: About". MIT. Retrieved July 2, 2009.
- ^ Santosh Nadgir and Grant McCool (May 13, 2009). "Lawsuit claims Picower profits from Madoff $5 billion". Reuters. Retrieved July 2, 2009.
- ^ a b Diana B. Henriques and Zachery Kouwe (May 12, 2009). "Billions Withdrawn Before Madoff Arrest". New York Times. Retrieved July 2, 2009.
{{cite web}}: Italic or bold markup not allowed in:|publisher=(help) - ^ Henriques, Diana (October 1, 2009). "Trustee Cites 2003 Problem in Madoff Account". New York Times.
{{cite news}}: Italic or bold markup not allowed in:|publisher=(help) - ^ "Picower, Sued by Madoff Trustee, Died of Heart Attack (Update2)". bloomberg.com. 2009-10-26. Retrieved October 27, 2009.
- ^ "Death of Jeffry M. Picower Ruled Accidental Drowning". Palm Beach Police Department. October 26, 2009. Retrieved October 26, 2009.
- ^ Janjigian, Robert (October 29, 2009). "Jeffry Picower laid to rest at Long Island cemetery".