Stanley Chais dies at 84: Money manager invested with Madoff
Stanley Chais, the Beverly Hills money manager who helped invest hundreds of millions of dollars from his clients with Bernard L. Madoff, died Sunday in New York, a spokeswoman for the New York City medical examiner said. He was 84.
Chais, who was facing a lawsuit by the Securities and Exchange Commission and was under criminal investigation by federal prosecutors in New York, had been suffering from a rare blood disease.
He died at an undisclosed location in Manhattan, said Ellen Borakove, spokeswoman for the New York City chief medical examiner.
Before the Madoff allegations surfaced, Chais was known as a generous philanthropist who had donated millions of dollars to organizations in Israel.
In 2009, the SEC filed civil charges against Chais, alleging that he had steered hundreds of millions of dollars from investors to Madoff, generating some $270 million in fees, and that he knew Madoff was operating a Ponzi scheme. When the scheme collapsed in 2008, Chais' clients had balances of more than $900 million, the SEC said.
The U.S. attorney’s office persuaded a judge to issue a stay on the SEC lawsuit so that it could pursue a criminal investigation. No criminal charges were ever filed.
The SEC had accused Chais of telling clients that he was investing the money himself, but instead giving it all to Madoff. He also is was accused of delivering false account statements to investors to disguise how the money was invested.
Chais' attorney, Eugene Licker, has maintained that Chais had no idea that Madoff was operating a Ponzi scheme.
“Mr. Chais and his family were major victims of the Madoff fraud,” he said in a statement in 2009. “The notion that he was complicit in it is outrageous.”
To date, six people -- Madoff and five employees -- have been prosecuted in connection with Madoff's fraud, the largest Ponzi scheme in U.S. history.
None of the investment advisors who funneled money to Madoff face criminal charges; Chais was the only advisor who prosecutors had identified as a subject of a criminal investigation.
In an interview earlier this month, Chais’ wife, Pamela, said that her husband was extremely ill and that he was receiving regular dialysis treatment.
“My husband is in very bad health,” she said from the couple‘s Manhattan apartment. “I spend most of my time between the apartment, taking care of it, and the hospital. It's a nightmare for him and me. Thank God we love each other.”
Chais had moved from Los Angeles to New York to receive medical care.
-- Stuart Pfeifer and David Sarno