Deep Pockets

Posted on February 4, 2009 in Arizona Law Regarding Business and Real Estate

When I broke the NCFE ( fraud back in 2002, the first thing I did was sue the third-party professionals, the lawyers, accountants and financial firms, who helped NCFE commit their crimes. My favorite law school professor Charles Ayers always said, “go for the deep pockets.” Well, it is now time for the Minnesota accounting firm of McGladrey & Pullen to give back some of the money they got for helping Bernie Madoff. The firm has just been sued in both Madoff’s and Tom Petters’ Ponzi schemes.

Last week, an investment fund that placed $280 million with Madoff sued in Connecticut state court saying its auditors — Goldstein Golub Kessler in 2006 and McGladrey & Pullen in 2007 — failed to detect the fraud. And, in October, the Ellerbrock Family Trust filed a similar suit in federal court in Minnesota saying that McGladrey & Pullen failed to conduct thorough audits or take other actions that would have uncovered alleged fraud by Petters’ companies.

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