| Jeffry Picower | |
|---|---|
| Born | Jeffry M. Picower May 5, 1942 |
| Died | October 25, 2009 (aged 67) Palm Beach, Florida, U.S. |
| Occupation | Investor, lawyer |
Jeffry M. Picower (May 5, 1942– October 25, 2009)[1][2] was an American investor and noted philanthropist involved in the Madoff investment scandal.
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Picower was a certified public accountant and lawyer.[3] However, he appears to have made most of his sizable fortune by investing.[3] According to the Jewish newspaper The Forward, Picower was a donor to many Jewish charities during his career, giving away over 2 million dollars during 2007 alone.[4]
As an accountant at Laventhol & Horwath in the 1980s, Picower set up questionable tax shelters.[5] When the IRS challenged their validity, one of Picower's clients sued him and the firm.[5] The case was quietly settled out of court.[5]
In 1983, Picower was rebuked by the Securities and Exchange Commission for late disclosure of his greater than 5% position in a company involved in a merger.[5]
In 1991, Picower and Anthony Cerami established a charity, the Picower Institute for Medical Research,[5] at North Shore University Hospital in Manhasset, New York, with an initial endowment of $10 million.[6] Researchers led by Kevin J. Tracey made a potentially valuable discovery, with possible applications in the treatment of rheumatoid arthritis, Crohn's disease, and multiple sclerosis.[7][8] It was spun off into a for-profit company, Cytokine Networks, which was later merged with privately-held PharmaSciences to form Cytokine PharmaSciences. However, it was revealed that Picower owned 76% of PharmaSciences stock and actually controlled 86.2%, putting him in a conflict of interest in the merger negotiations.[5]
After Physician Computer Network, Inc., went bankrupt, Picower, the chairman of the board and 45% shareholder, had to give $21 million to other shareholders in 2000[5] after it was discovered that company executives had falsified financial statements.[9]
Alaris Medical Systems, 65% owned by Picower, was taken over by Cardinal Health in 2004 for $1.6 billion.[10]
Picower has been listed by Forbes magazine as one of the top 400 richest people in the United States for 2009, his only time on the list.[11]
The Jeffry M. and Barbara Picower Foundation was created in 1989 by Picower and his wife Barbara.[10] Barbara Picower was listed as Executive Director and trustee, with both Picowers being members of the board of directors.[12] Longtime friend Bernard Madoff managed foundation assets listed at over $1 billion.[10][13] It distributed over $268 million in grants to various American organizations, including Human Rights First and the New York Public Library.[10][13] In 2002, it granted $50 million to the Massachusetts Institute of Technology neuroscience research center, which was subsequently renamed the Picower Institute for Learning and Memory.[10][14] However, the Picower Foundation was forced to close in 2009 due to losses arising from the uncovering of Madoff's Ponzi scheme.[13]
In June 2009, Irving Picard, the trustee liquidating Madoff's assets, filed a lawsuit against Picower in the U.S. Bankruptcy Court for the Southern District of New York (Manhattan), seeking the return of $5.1 billion in profits, alleging that Picower and his wife knew or should have known that their rates of return were "implausibly high", with some accounts showing annual returns ranging from 120% to more than 550% from 1996 through 1998, and 950% in 1999.[15][16] According to a June 28, 2009 MSNBC article, that would make the Picowers the biggest beneficiaries of Madoff's scam, exceeding even Madoff himself.[3] The Picowers' lawyer, William D. Zabel of Schulte Roth & Zabel, responded that, "They were totally shocked by his fraud and were in no way complicit in it."[16]
On October 1, 2009, an additional court filing from the Madoff trustee documented an apparently fraudulent gain benefiting Picower. "According to the new filing, Mr. Picower opened an account with Mr. Madoff on April 18, 2006, by wiring a check for $125 million, more than a quarter of the entire sum he invested with Mr. Madoff over time. Within two weeks, the $125 million deposit had purportedly grown to $164 million because of a dramatic ‘gain’ on the securities held in the account—all of which supposedly had been purchased three months earlier ... Five months later, Mr. Picower withdrew his original $125 million, leaving $81 million in the account. There is no legitimate explanation for these events nor any possibility that they escaped Picower’s notice."[17]
On October 25, 2009, Jeffry Picower was found at the bottom of the pool of his Palm Beach home and could not be revived. Picower's wife, Barbara, told dispatchers she found him "at the bottom of their swimming pool" at their oceanfront estate shortly after noon, Palm Beach police said. He was taken to Good Samaritan Hospital, where he was pronounced dead about 80 minutes later.[18]
According to the Palm Beach Police Department, "An autopsy of the body of Jeffry M. Picower was performed this morning. The Palm Beach County Medical Examiner's Office determined that Mr. Picower suffered a massive heart attack while in the swimming pool resulting in accidental drowning."[19]
He was buried on October 27, 2009, in Mount Ararat Cemetery in Farmingdale, New York.[20]
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