Madoff associate drowns leaving $7.2bn mystery

An American billionaire thought to be the biggest beneficiary of Wall Street fraudster Bernie Madoff's $65bn Ponzi scheme was found dead at the bottom of his Palm Beach swimming pool on Sunday. Jeffry Picower was pulled out of the water by his wife Barbara and housekeeper.

It is not clear how he died. The Wall Street Journal was told by a family spokesman that he had been suffering from Parkinson's Disease. But because of accusations that he might have been complicit in Madoff's fraudulent scheme, there has been speculation overnight that he could have committed suicide.

It is no secret that Jeffry and Barbara Picower were friends of Madoff, now serving a 150-year jail sentence, and that they profited enormously from investing with Madoff - to the tune of $7.2bn over the past 20 years according to the latest calculation. The question is whether Picower was party to the embezzlement.

Irving Picard, the lawyer tasked with liquidating Madoff's investment company, believes he was. At the end of September, Picard sued Picower for the return of the $7.2bn.

Picard argued that Picower, along with his wife and associates, must have known that the returns they were getting from Madoff - some as high as 950 per cent - were ill-gotten gains. "Given that Picower withdrew more of other investors' money than any other customer," his "repeated references to himself as a 'victim' ring hollow," Picard said.

William Zabel, Picower's lawyer, said Picard's accusation was "false and outrageous". He filed papers to dismiss the Picard lawsuit before his client's death.

Picard, who is leading a global search to recover money for thousands of defrauded investors, has sued for some $15bn including the Picower money. He has collected about $1.5bn so far.

Picower began his career as an accountant and lawyer and then made money investing in the medical sector. He and Barbara were two of Florida's biggest philanthropists. But their Picower Foundation had to be closed at the start of the year when the extent of the Madoff fraud came to light. ·