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Merkin, the fallen hedge-fund billionaire who lost as much as $3 billion in investor funds in Bernie Madoff's alleged $50 billion Ponzi scheme, has attracted the attention of New York State Attorney General Andrew Cuomo, whose lawyers are said to be looking over various pieces of evidence ahead of a possible full-fledged probe.

The 54-year-old investor, who has not been charged with any wrongdoing and claims to be a victim alongside other investors in his hedge funds, came under fire in the past 10 days because of his role in feeding funds into Madoff's operation while at the same time serving as Chairman of GMAC, the auto- and home-financing company.

At yearend, GMAC obtained $6 billion in federal rescue money and many felt Merkin, accused in several civil suits with not undertaking the enough due diligence vis-?-vis Madoff's funds, should not be trusted with billions in taxpayers funds.

Under intense scrutiny, Merkin resigned as chairman Friday - but he still faces much more heat.

Lawyers working for AG Cuomo have been closely monitoring the lawsuits against Merkin, sources familiar with the matter say, they are weighing whether to launch an investigation into his practices with Madoff and his bogus investment funds.

Merkin promised his investors a careful and wise investment strategy that would scour dozens of different options - but at least one fund, his $1.8 billion Ariel Fund, had all its assets invested with a single entity, Madoff.

Despite this apparent misleading marketing message given to his investors - and despite the fact that these investors, including charities and universities could have invested directly with Madoff without paying any fees - Merkin pocketed hundreds of millions of dollars in fees over the years.

In addition to having lawyers from the AG's office nosing around and having to deal with several civil suits from New York University, New York Law School and other fund investors, who lost tens of millions of dollars because of his alleged fraudulent actions, Merkin is also facing the prospect of another blizzard of civil lawsuits in the next 10 days.

Investors who lost between $80 million and $100 million investing in Merkin's fund of funds are expected to sue, according to their lawyer.

"Most of these people I am representing had never heard the name Bernie Madoff until the fraud was exposed," the lawyer, Jake Zamansky, said. "They thought they were investing with Ezra Merkin. The least they expected him to do was to look under the hood of the vehicles he invested their money in. He clearly did not do that."

Zamansky said he has around 10 clients - each of whom lost "north of $10 million" investing with either Merkin or Madoff.

NYU is suing him over $24 million of losses from his Ariel Fund. The school claims its investment was placed with Madoff without permission. Other big investors, including Yeshiva University, and New York Law School, also blame Merkin for squandering millions on Madoff without their knowledge.

Merkin lives in a duplex apartment at 740 Park Avenue in Manhattan, a co-op building known as the richest address in New York.

He is the son of the late Hermann Merkin, a lion of Jewish philanthropy who gave millions to help build Yeshiva University, the Fifth Avenue Synagogue and Merkin Concert Hall in New York.

Michael Gross, author of a book about the swanky building, said 740 Park's wealthy denizens are all of afluster about Merkin's legal mess. "I am sure they are all worried about what all this means for the value of their apartments and the financial stability of their co-op," he said.

Andrew Levander, a lawyer representing Merkin, declined to return calls seeking comment. A spokesman for AG Cuomo also decline to comment.

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