Madoff Scam Now Affecting Divorces
A lawyer is suing his former wife for millions he paid to buy her out of their joint Madoff investment account. Steve Simkin, a Manhattan lawyer, paid Laura Blank $2.7 million in a divorce settlement in 2006, as her share of the value of the investment account with the now infamous Bernard Madoff. Now, he wants his money back.
The AP is reporting, “Simkin, 61, says in papers filed late Tuesday in Manhattan’s state Supreme Court that he learned the account was empty, that its valuation “was a sham and a fiction,” after Madoff’s arrest Dec. 11. Simkin, of Scarsdale, N.Y., said he also learned from news accounts that Madoff, a former Nasdaq stock market chairman, confessed to his employees and to the FBI that he had committed what appears to be the biggest financial fraud in history.”
It’s doubtful Simkin will get the agreement reversed, but it has been speculated it may depend on how much money was actually invested at the time of the divorce. If Simkin left money in a bad investment, he may have to live with his decision. Clearly if the account had doubled in value he would not be offering Blank a share of the proceeds. People take these types of calculated risks all the time when they divorce - in lieu of splitting a 401K or selling a house, the person will simply give the other party the cash value of their share. Settlement Agreements are incredibly difficult to get out of. Judges are extremely leary of letting people out of a contract simply because they have “buyers remorse”. There is huge risk that allowing Simkin to set aside the agreement based on the Madoff fraud would open the flood gates and allow anyone who regrets entering into their agreement an opportunity to relitigate the matter.