Documents released by a judge on Friday related to New York University’s lawsuit against financier J. Ezra Merkin show that Merkin was warned as far back as 1992 that Bernard L. Madoff might not be what he appeared.

The documents were obtained in response to a motion filed by FOX Business Network.

In a deposition taken in February, financial advisor Victor Teicher stated that he told Merkin in the early 1990s that he felt Madoff’s investment firm didn’t “smell right.”

Teicher is a convicted felon who was employed by Merkin on and off during the period Merkin is accused of funneling money to Madoff without his clients’ knowledge.

According to Teicher’s deposition, on Dec. 12, a day after Madoff was arrested for operating possibly the largest investment fraud in history, Teicher sent Merkin an e-mail stating: “The Madoff news is hilarious; hope you negotiate out of this mess as well as possible; I’m yours to help in any way I can; unfortunately, you’ve paid a big price for a lesson on the cost of being greedy.”

And: “I guess you did such a good job in fooling a lot of people that you ultimately fooled yourself.”

NYU sued Merkin in December, claiming it lost $24 million in Madoff’s fraud.

Merkin’s lawyer, Andrew J. Levander, did not immediately return a call seeking comment.

Also included in the documents are quarterly reports sent by Merkin to NYU’s Endowment Fund, which purport to outline Merkin’s investment strategy for the millions of dollars NYU had invested with Merkin.

Specifically, Merkin wrote to NYU explaining his investment decisions each quarter.

However, in NYU’s lawsuit, as well as fraud charges filed earlier this month by the New York State Attorney General’s office, Merkin is accused of simply turning his investors’ money over to Madoff. In addition, the allegations against Merkin charge that he repeatedly turned a blind eye to potential red flags that Madoff was operating a Ponzi scheme.

In some of the NYU quarterly reports, Merkin touted his transparency and warned that “hypothetical” money managers could simply report returns without explaining how they got them.

That’s exactly what Madoff admitted to when he pleaded guilty on March 12 to 11 felony counts. Madoff faces a maximum of 150 in jail when he is sentenced on June 16.

If the suits against Merkin are found to have merit, than many of the statements contained in the documents released Friday are nothing if not ironic.

“Our business is all about controlling the downside, which occasionally requires us to forego money-making opportunities,” he wrote in a report dated April 18, 2000.

Merkin is accused in the fraud case of collecting $470 million in management and incentive fees from Madoff in return for funneling $2.4 billion to Madoff from various investors.

In the same report, noting that huge financial incentives often lead money managers to take big risks, he wrote:
"Tempering this tendency, we would hope, is a sense of fiduciary responsibility. Failing that, the prospect of a public hanging tends to concentrate the mind wonderfully.”

Merkin is an influential figure, especially in New York, where he was prominent both on Wall Street and in social and charitable circles. While he and Madoff were still riding high, Merkin sat on the boards of such New York institutions as Carnegie Hall, Yeshiva University and the Fifth Avenue Synagogue.