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Jennifer Robison

Investors with Vegas ties linked with Madoff

9 February 2009

LAS VEGAS, Nevada -- A massive hedge fund failure on the East Coast has ensnared nearly 20 investors with Las Vegas ties, including a prominent attorney and a one-time casino owner.

A list filed in federal bankruptcy court Wednesday reveals that 17 people who live or do business in Southern Nevada invested money with financial adviser and securities trader Bernard Madoff. Among them: high-profile attorney Sam Lionel and former Stratosphere owner Lyle Berman.

The client roster doesn't include details about how much each investor placed with Madoff, and locals seemed unwilling to discuss the details of their financial exposure in the case.

Lionel's assistant said he was unavailable Friday afternoon to comment. Berman didn't return phone calls or e-mails to his Minneapolis office. Another half-dozen or so local investors either didn't return phone calls or declined to talk about the Madoff situation.

Lionel founded the 42-year-old Lionel, Sawyer & Collins, one of Nevada's biggest and most powerful law firms. Lionel has represented some of the Silver State's best-known business figures, including Flamingo builder Del Webb, casino investor Kirk Kerkorian and Las Vegas Sands Corp. Chairman Sheldon Adelson.

Berman co-founded Grand Casinos, which owned the Stratosphere from 1994 to 1998, when the company missed some bond payments and lost control to financier Carl Icahn. Grand Casinos spun off Lakes Entertainment, where Berman is chief executive officer. The Minnesota company owns five casinos. The poker world also knows Berman well: He's won three World Series of Poker bracelets and placed fifth in the series' H.O.R.S.E. World Championship in 2008. His lifetime poker winnings total nearly $2 million, according to his profile at

Though Berman's business is based in Minneapolis, the Madoff roster lists his address as 1 Hughes Center, where luxury high-rise condominium community Park Towers is located.

Madoff remains under house arrest in his New York home while federal prosecutors investigate him for securities fraud. They allege Madoff ran a Ponzi scheme that might have bilked as many as 13,500 investors of $50 billion over a period of many years, including $17 billion under management in 2008. Authorities accuse Madoff of taking money from new investors to pay off former investors.

The scheme came to light in December, when jittery investors began pulling their money out of Madoff's fund to protect their assets from further losses in the stock market.

An attorney serving as a trustee in the liquidation of Madoff's companies told Newsday on Thursday that a preliminary search for assets had turned up less than $1 billion. The attorney also said the nonprofit Securities Investor Protection Corp. will reimburse investors up to $500,000 for their losses.

Several national public figures rank among Madoff's former clients. Baseball star Sandy Koufax, actor John Malkovich and the charitable foundation of film director Steven Spielberg all invested with the financial adviser.