Madoff Moneyman Ezra Merkin Near $400 Million AG Deal

Madoff feeder funder Ezra Merkin is close to ponying up $400M in a settlement with the New York attorney general

After a bitter three-year legal battle, Ezra Merkin, the Manhattan moneyman who funneled more than $2 billion to convicted Ponzi king Bernie Madoff, is nearing a settlement with the New York attorney general that could have him shell out as much as $400 million, The Post has learned.

Sources said the settlement with AG Eric Schneiderman would recover the bulk of the $470 million in fees the notorious middleman pocketed from investing his clients’ cash with Madoff.

Schneiderman has pursued a civil suit brought in 2009 by then-AG Andrew Cuomo against Merkin, charging him with misleading clients by telling them he invested their money when he was turning it over to Madoff.

It’s unclear exactly when an accord will be announced, but sources said that Merkin’s attorneys, led by Andrew Levander, have been telling people they’re “closer than ever” to a settlement.

One fly in the ointment, however, may be striking a deal with Madoff bankruptcy trustee Irving Picard, who is seeking to recover some $500 million in money that Merkin withdrew from Madoff’s fund.

“The AG has a deal with [Merkin], but the problem is working something out with Irving Picard,” said one person familiar with the talks. “Picard is not being all that cooperative. I know the AG and [Merkin’s] lawyers are very frustrated. Picard’s been holding everyone up.”

Merkin, 58, who has been assailed by a raft of lawsuits from burned investors in his so-called feeder funds, wants a sweeping accord that would end his legal wrangling with both the AG’s office and Picard, sources said.

Schneiderman could still settle with Merkin, leaving the financier to haggle with Picard, they added.

A spokesman for the attorney general’s office declined to comment, as did a spokeswoman for Picard.

A spokesman for Levander, Merkin’s attorney, also declined comment.

A settlement could offer some solace to hundreds of Merkin investors seeking to recover funds lost to Madoff’s scheme. Merkin has been hit with a string of lawsuits and arbitrations by individual investors, but has made relatively few payouts despite the growing number of verdicts against him.

Meanwhile, Merkin — once a respected philanthropist who was forced to step down as an officer of the Fifth Avenue Synagogue, a wealthy congregation founded by his father — has held on to his billionaire lifestyle.

Merkin resides in an 18-room duplex at one of New York’s poshest addresses at 740 Park Ave. that is worth $20 million. He also owns prime beachfront property in Atlantic Beach worth $1.5 million.

Merkin might have to auction off more assets to pay for a potential $400 million settlement. His assets have been frozen by the AG’s office and he was forced to sell a collection of Mark Rothko paintings that fetched $310 million.

Roughly $190 million of the proceeds from the Rothko sale, after taxes, are being held in escrow by the AG and could go toward the settlement.