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Monday, September 27, 2010

Accused Madoff middleman Stanley Chais dies

Disgraced financier Bernard Madoff, center, leaves U.S. District Court in Manhattan

Stanley Chais
The Hollywood money manager was under investigation for allegedly operating a feeder fund for Bernard Madoff.

Stanley Chais, a Beverly Hills money manager for Hollywood's elite who was accused of recklessly plowing nearly e1 billion in client funds to Bernard Madoff, has died. He was 84.

Chais died on Sunday in Manhattan of natural causes, according to Grace Brugess, a spokeswoman for the New York City chief medical examiner.

The U.S. Securities and Exchange Commission accused Chais in a June 2009 civil lawsuit of funneling client money to Madoff, a close friend since the 1960s, while ignoring red flags that Madoff's seemingly steady returns were bogus.

Chais had said he, too, was a Madoff victim and lost nearly all his money in the fraud, which prosecutors have estimated at e65 billion.

The SEC said Chais, who handled investments for many in Hollywood, including director Steven Spielberg, oversaw three funds that lost e917 million with the now imprisoned Ponzi scheme operator.

Regulators accused Chais of pocketing e270 million of fees from running the funds, and accused him and his family of withdrawing e546 million more than they invested with Madoff.

His lawyer, Eugene Licker, has denied that his client committed wrongdoing. Licker on Monday confirmed Chais' death and declined further immediate comment. An SEC spokesman also had no immediate comment.

Chais had suffered from "profound anemia" and "significant fatigue" stemming from a blood disease, according to an April 2009 letter from his doctor Stephen Nimer, filed in Manhattan bankruptcy court.

Known for his support for Jewish charities such as the Hebrew University of Jerusalem and Weizmann Institute, Chais is the second key figure associated with Madoff to die since the scheme was uncovered in December 2008.

Madoff, 72, is serving a 150-year sentence in a North Carolina federal prison

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