Baltimore Pension Fund Loses $3.5M in Madoff Scheme

January 5, 2009 ( - The pension fund for Baltimore police and fire employees lost about $3.5 million invested in a fund with ties to fallen money manager Bernard L. Madoff.

The Baltimore Sun reports the $1.5-billion pension fund had about $73 million under management with New York-based UBP Asset Management, which invested about 5% of that money with Madoff, according to pension board Chairman Stephen G. Fugate. Fugate told the Sun the pension board learned about its Madoff exposure on December 16 and cut ties with UBP immediately.

The board anticipates dissolving its relationship with UBP by March and will likely join a lawsuit already filed by another Madoff victim, Fugate said, according to the newspaper.

In December, the law firm of Keller Rohrback LLP announced it is “…investigating the legal options of retirement savings and pension plans that have been affected by the long-running Ponzi scheme at Bernard Madoff Investment Securities.” (see ERISA Litigator Seeks Plan Fiduciaries )

The $50-billion Ponzi scheme orchestrated by Madoff has affected other public funds (see CT Town Pension Claims $42M Madoff Fund Loss ), as well as corporate defined contribution plans, and non-profit foundations (see List of Retirement Plan Victims of Madoff Scheme Grows ). The Securities and Exchange Commission (SEC) is weeding through the list of assets provided by Madoff to determine affected investors.