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Mets Owners Considered Fraud Insurance For Madoff Investments
By
Jen Chung
Published May 20, 2011
Modified May 20, 2011
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By
Jen Chung
Published May 20, 2011
Modified May 20, 2011
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Mets owners Fred Wilpon and Saul Katz invested a lot of money with Bernard Madoff, which has meant some cash problems for the Amazin's since the investment was actually a Ponzi scheme. They have claimed that they had no idea they were being duped, but now the trustee in charge of locating assets for Madoff's victims says that they were shopping for fraud insurance way back in 2001. As the NY Times reports, "A senior executive in Wilpon’s and Katz’s company met with an insurance representative. The executive, Arthur Friedman, then reported back to his bosses — both what the insurance would cost, and the fact that it would protect against a variety of frauds, including a Ponzi scheme."
While no fraud insurance was purchased, according to court papers, trustee Irving Picard argues, "The very fact [they] were in the market for this ‘one of a kind’ insurance policy establishes incontrovertibly" that they were aware of Madoff’s "possible fraud... Contrary to the image that the Sterling partners seek to convey that they were unsophisticated, 'duped' investors, the Sterling partners were well aware of the risks... And faced with the knowledge that Madoff may have been running a Ponzi scheme, the Sterling partners did not conduct due diligence, but instead set about devising a strategy to protect their Madoff investments . . . and yet still continue to profit from Madoff along the way."
A spokesman for Sterling Equities, Wilpon's and Katz's non-baseball business, told the Daily News, "They didn't go shopping. A trusted colleague made a recommendation about looking at insurance, so they spoke to an insurance salesman, received some basic information and they ultimately decided not to purchase it because they trusted Mr. Madoff - and believed that they did not need it."
Tagged
Bernard Madoff
fred wilpon
irving picard
mets
ponzi scheme
saul katz
Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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Gothamist is funded by sponsors and member donations
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