Mets fans are used to errors on the field, but not in the bank. Fred Wilpon and Saul Katz, the owners of the New York Mets, have settled a lawsuit concerning their profits from the much-publicized Bernie Madoff Ponzi scheme, the biggest investment fraud ever conducted. Irving Picard, the trustee hoping to recoup the investments lost in the Madoff case, had sued the Mets owners accusing them of “willful blindness”, or that they were aware of Madoff’s fraud, but ignored it because they were making money. Early adopters of Ponzi schemes often make money in the time it takes to collapse. The settlement today makes sure that those claims of willful blindness never go to court, claims which Picard thinks a jury would have found true. Jury selection for this trial was set to occur this morning. Luckily for the Mets, the owners settled for $162 million, nearly half of the $386 million they could have had to pay out. This is in addition to the $83.3 million in profits the judge in this case had already ordered to be paid back.
It will be interesting to watch how the rest of the Madoff damages litigation pans out. Despite the 74-year-old head honcho already convicted and in jail for a 150-year term, the recovery effort is still going strong, with Picard getting about $11 billion of the lost $17.3 billion returned. It is a little late in the game now, but who knows. Maybe all those rich people who trusted their money with a flimsy criminal will get their money back. Also, maybe pigs will fly. Here’s hoping!
- Our blog post on Ponzi schemes
- The National Post article about this settlement
- An interesting take on the recent Goldman-Sachs quitter and Bernie Madoff