Financier and money manager J. Ezra Merkin will stop managing his hedge funds and place them into receivership at the demand of New York Attorney General Andrew Cuomo, a person familiar with the matter told the Wall Street Journal.

Last month, Cuomo filed a civil suit against Merkin claiming he “betrayed hundreds of investors” by repeatedly lying to them about how he invested their money.

Merkin was charged last month in a civil lawsuit by Cuomo of sending $2.4 billion in investor funds to a firm run by convicted swindler Bernard Madoff.

Merkin will no longer control his funds Ascot, Gabriel and Ariel, the person told the Journal. Nearly $1 billion remaining in the Gabriel and Ariel funds will be given to one receiver. The Ascot fund, which lost $1.8 billion in assets with Madoff will be placed with another receiver.

Merkin’s attorney Andrew Levander told the Journal in a statement his client was working closely with the Attorney General and has agreed in principle to appoint receivers for the funds while helping to wind down the funds.

Separately, the trustee for Madoff’s firm has sued Merkin for $558 million that his funds withdrew from Madoff’s firm, the report stated.

New York Investment Down