Ira Sorkin

In November 1992, Sorkin represented two accountants, Frank J. Avellino and Michael S. Bienes of Fort Lauderdale. Bienes began his career working as an accountant for Madoff's father-in-law, Saul Alpern. Then, he became a partner in the accounting firm Alpern, Avellino and Bienes. In 1962, the firm began advising its clients about investing all of their money with a mystery man, a highly successful and controversial figure on Wall Street, but until this episode, not known as an ace money manager,[3] (Madoff). When Alpern retired at the end of 1974, the firm became Avellino and Bienes and continued to invest solely with Madoff.[4][5]

Avellino & Bienes were accused of selling unregistered securities, and in its report, the SEC mentioned the fund's "curiously steady" yearly returns to investors of 13.5% to 20%. However, the SEC did not look any more deeply into the matter, and never publicly disclosed Madoff.[3][4] Through Sorkin, who once oversaw the SEC's New York office, Avellino & Bienes agreed to return the money to investors, shut down their firm, undergo an audit, and pay a fine of $350,000. Avellino complained to the presiding Federal Judge, John E. Sprizzo, that Price Waterhouse fees were excessive, but the judge ordered him to pay the bill of $428,679 in full. Madoff said that he did not realize the feeder fund was operating illegally, and that his own investment returns tracked the previous 10 years of the S&P 500.[4] The SEC investigation came right in the middle of Madoff's three terms as the powerful chairman of the NASDAQ stock market board. [5]

The size of the pools mushroomed by word-of-mouth, and investors grew to 3,200 in nine accounts with Madoff. Regulators feared it all might be just a huge scam. "We went into this thinking it could be a major catastrophe. They took in nearly a half a billion dollars in investor money, totally outside the system that we can monitor and regulate. That's pretty frightening." said Richard Walker, at the time, the SEC's New York regional administrator. [3] The case number is: SEC v. Avellino & Bienes et al., Lit. Rel. No. 13443 (Nov. 27, 1992). [6]

Bienes, 72, recently discussed that he deposited $454 million of investors' money with Madoff, and until 2007, continued to invest several million dollars of his own money. "Doubt Bernie Madoff? Doubt Bernie? No. You doubt God. You can doubt God, but you don't doubt Bernie. He had that aura about him." His $6.7 million home in the exclusive Bay Colony of Ft. Lauderdale is presently for sale.[5]

Sorkin also represented accountants, Steven Mendelow of New York City and Edward Glantz of Lake Worth, Fla., who in 1989 began their own pool, Telfran Ltd., investing in Avellino & Bienes, and sold $89.6 million in unregistered notes. They were charged in a separate SEC civil lawsuit alleging that Telfran made money by investing in Avellino & Bienes notes paying 15% to 19% annually, while paying Telfran investors lower rates. All funds were ordered by the SEC to be returned to the investors. The case is: Civil Action No. 92·8564, SDNY (LR·13463)[3] [7]

Mr. Mendelow has also been subpoenaed in the present Madoff Scandal and is cooperating, according to his lawyer, who said he engaged in no wrongdoing. "I don't think he has done anything to promote Mr. Madoff since the 1992, 1993 decree," said Stanley S. Arkin, Mendelow's lawyer.[8] One of the lawyers of the firm was giving information to the reporter of Fox Business during the Court process. Under the says of the New York Bar it was not very ethical.