Family of Trump’s Treasury Secretary Pick Profited in Madoff Scheme
Image by Getty Images
By Josh Nathan-Kazis December 1, 2016
The family of Donald Trump’s new nominee for Secretary of the Treasury was among the lucky few that walked away from Bernard Madoff’s Ponzi scheme with millions in alleged profits.
Stephen Mnuchin and his brother inherited their mother’s account in Madoff’s investment fund in 2005, three years before the scheme imploded, Bloomberg reported in May. The brothers emptied the account shortly after.
In a lawsuit filed after Madoff’s scheme imploded, Irving Picard, the trustee for the Madoff bankruptcy, tried to take back $3.2 million of what the Mnuchins had withdrawn, saying that the funds were not really investment gains, but actually other people’s money that Madoff had shuffled into their account to further his scheme.
No member of the Mnuchin family was accused of having known that Madoff was running a Ponzi scheme.
The lawsuit, one of hundreds of similar actions brought by Picard, was dropped after an appeals court ruled that funds withdrawn more than two years before the bankruptcy could not be clawed back. The Mnuchin family was allowed to keep the $3.2 million.
“This was one of hundreds of cases that there was a decision on,” Mnuchin told Bloomberg in May. “There is nothing special about this case.”
Contact Josh Nathan-Kazis at nathankazis@forward.com or follow him on Twitter, @joshnathankazis.
A message from our CEO & publisher Rachel Fishman Feddersen
I hope you appreciated this article. Before you move on, I wanted to ask you to support the Forward’s award-winning journalism during our High Holiday Monthly Donor Drive.
If you’ve turned to the Forward in the past 12 months to better understand the world around you, we hope you will support us with a gift now. Your support has a direct impact, giving us the resources we need to report from Israel and around the U.S., across college campuses, and wherever there is news of importance to American Jews.
Make a monthly or one-time gift and support Jewish journalism throughout 5785. The first six months of your monthly gift will be matched for twice the investment in independent Jewish journalism.
— Rachel Fishman Feddersen, Publisher and CEO
