Stanley Chais (March 27, 1926 – September 26, 2010) was an American investment advisor and philanthropist who operated "feeder funds" which collected money for funds related to the Madoff investment scandal.
|Born||March 27, 1926|
Bronx, New York
|Died||September 26, 2010 (aged 84)|
|Occupation||Investment advisor, philanthropist|
Involvement in Madoff's Ponzi schemeEdit
Chais operated three funds that offered returns of up to 25%. He told clients that he achieved the returns using a complex combination of derivatives, stock, currency and futures trading. Instead, the funds were merely funneled into Madoff's Ponzi scheme.
On May 1, 2009 Irving Picard, bankruptcy trustee for Madoff Securities, filed a lawsuit against Stanley Chais. The complaint alleges he "knew or should have known" he was deep in a Ponzi scheme when his family investments with Madoff averaged 40% and sometimes soared as high as 300%. It also claims Chais was a primary beneficiary of the scheme for at least 30 years, allowing his family to withdraw more than $1 billion from their accounts since 1995 - money that belonged to Madoff victims. The case number is Picard v. Chais, 09-01172. On June 22, 2009, the Securities and Exchange Commission filed civil fraud charges against Chais. On September 23, 2009, California Attorney General Jerry Brown filed a lawsuit against Chais seeking $25 million in penalties and restitution for victims.
On November 19, 2016, the United States Bankruptcy Court for the Southern District of New York approved a global settlement – made in cooperation with the California Attorney General -with the defendants in Picard v. the Estate of Stanley Chais, et al. The agreement was made with the Stanley Chais estate, Chais’s widow, and a number of Chais family members, investment funds, trusts, companies, and other entities associated with Chais. Under the terms of the agreement, the BLMIS Customer Fund received a cash payment of $258.47 million, as well as the assignment of other assets that will be liquidated over time. All proceeds of the settlement will go to the BLMIS Customer Fund for the benefit of BLMIS customers with allowed claims.
Chais founded the Chais Family Foundation, which donated extensively to organizations that preserve and further Jewish history and culture, from reestablishing and maintaining Jewish culture in areas where it was diminished by the Holocaust and by Soviet policy, to Israeli organizations. "In Israel, Chais sat on the boards of Technion, Weizmann Institute and Hebrew University of Jerusalem." The foundation, which had been funded through the Madoff scam, collapsed in December 2008.
He died on September 26, 2010 at age 84 in Manhattan, where he and his wife had moved to further the treatment of a blood disorder that eventually took his life.
- Pfeifer, Stuart (September 23, 2009). "Financial advisor Stanley Chais sued in Bernard Madoff scheme". The Los Angeles Times.
- Stuart Pfeifer, David Sarno, Stanley Chais dies at 84; money manager invested with Bernard Madoff, The Los Angeles Times, September 27, 2010
- Attorneys for Irving H. Picard (May 1, 2009). "Madoff: Lawsuit Against Stanley Chais". New York Times.
- Standora, Leo (May 2, 2009). "Los Angeles investment manager Stanley Chais sued for funneling cash to Bernie Madoff fund". New York Daily News.
- "SEC fraud charges against Chais" (PDF). The Wall Street Journal. June 22, 2009.
- Greenberg, Brad (February 11, 2009). "Israeli nonprofits honor Stanley Chais for years of charity". Jerusalem Post.
- Rettig, Haviv & Hoffman, Allison. "$600 million in Jewish charitable funds lost". Jerusalem Post.