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Madoff Victims, Trustee Bicker Over Recovering Funds
By
Jen Chung
Published Feb 3, 2010
Modified Feb 3, 2010
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By
Jen Chung
Published Feb 3, 2010
Modified Feb 3, 2010
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Yesterday, victims of Ponzi schemer Bernard Madoff faced off in court against the trustee liquidating Madoff's assets over how much they are owed. Victims believe they should be given claims based on their fake returns, while trustee Irving Picard disagrees. Picard's lawyer, who contended with "mocking laughter" and heckling pointed out, "No one in their right mind would suggest you should use the last statement. As soon as we give money to someone who took all their money out, we're taking money from another customer—stolen money."
Victims of Madoff's $64+ billion fraud were seduced by thinking their investments were really working for them, with amazing returns like 46% and 950%. They are hoping for the $500,000 maximum cash advance from the SIPC; a lawyer representing some victims said the last Madoff Investments statement should stand, "Congress’s intent was to protect a customer’s legitimate expectations, even if the broker stole the customer’s money and never bought securities."
However, Picard believes a formula of deposits minus withdrawals should be used—which would impact investors who took out money based on fake profits before the scam was revealed. One of those "net winners" investors includes Sterling Equities, owned by Mets owner Fred Wilpon, and if Picard has his way, Sterling could owe $48 million to other victims.
Bankruptcy Judge Burton Lifland told the two sides, "No matter how I come down and rule, it's going to be unpalatable to some degree to one party or another." It's unclear when he'll make a decision.
Tagged
Bernard Madoff
fake profit
fake return
fred wilpon
ponzi scheme
scam
sterling equities
Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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