Madoff middleman sued by California

California Attorney General Jerry Brown filed suit this week against a prominent Jewish philanthropist, financial manager Stanley Chais, for concealing that his investment strategy consisted solely of giving tens of millions of dollars to Bernard Madoff, despite his claims that he had a diverse portfolio for his clients.

Chais, who has a Beverly Hills brokerage, is being sued for at least $25 million in civil penalties, restitution for Madoff’s victims and disgorgement of Chais’ profits.

“Chais intentionally concealed his close ties to Madoff while collecting nearly $270 million in fees,” said Brown, calling Chais a friend of Madoff and “nothing more than a Madoff middleman.”

His Chais Family Foundation, which was wiped out when Madoff’s scam came to light, gave approximately $12.5 million annually to Jewish causes.

The suit comes after a seven-month investigation of Chais by Brown’s office that found a litany of violations of state law. In June, the U.S. Securities and Exchange Commission filed suit against Chais, alleging that he committed fraud. — jta