By Jonathan Stempel
NEW YORK, July 15 (Reuters) - Bernard Madoff's sons created accounts out of thin air and engineered sham loans to buy pricey Manhattan real estate as they diverted tens of millions of dollars of money from their father's firm, a court-appointed trustee said on Tuesday.
In an amended lawsuit against Andrew Madoff and the estate of older brother Mark Madoff, Irving Picard, who is liquidating Bernard L. Madoff Investment Securities LLC, said the brothers' activity reflected their "sense of entitlement" to undeserved riches.
Citing testimony from Frank DiPascali, who is the firm's former finance chief and is cooperating with federal prosecutors, Picard also accused the brothers of deleting emails linking them to their father's Ponzi scheme, amid a 2005 U.S. Securities and Exchange Commission examination of the firm's finances.
The lawsuit in Manhattan bankruptcy court alleges that Madoff's firm operated as a family piggy bank. Picard seeks to recoup $153.3 million from Andrew Madoff, the estate of Mark Madoff, and Mark's widow Stephanie Mack.
The case is Picard v. Estate of Mark D. Madoff et al, U.S. Bankruptcy Court, Southern District of New York, No. 09-ap-01503.
(Reporting by Jonathan Stempel in New York; Editing by Phil Berlowitz)