According to the court case, Merkin, who served as a former chairman of the finance company GMAC, deceived investors by accumulating $470m in client fees while diverting their funds to Madoff to foreign markets, according to Reuters.
In 2009, former New York attorney general Andrew Cuomo sued Merkin and his Gabriel Capital Corp in New York State Supreme Court, accusing him of self-dealing, reckless conduct and gross negligence.
Merkin is also engaged in discussions with Irving Picard for the settlement of the case, the trustee who has been trying to recover money for Madoff investors, said the news agency.
Merkin intends to settle the trustee case and the New York lawsuit, simultaneously.
Merkin, who managed the Ascot, Gabriel and Ariel funds, is also a philanthropist and art collector.
