Entries in Bernard Madoff (7)


Mets Owners Agree to Pay $162 Million to Madoff Victims

Mario Tama/Getty Images(NEW YORK) -- The owners of the New York Mets agreed Monday to pay $162 million to settle claims that they willfully ignored the Ponzi scheme orchestrated by Bernie Madoff.

"We believe that this is a fair and just settlement," said David Sheehan, chief counsel to Irving Picard, the court-appointed trustee recovering money on behalf of Madoff's defrauded clients.

The trustees had demanded six years of "fictitious profits" that team owners Saul Katz and Fred Wilpon allegedly earned from their Madoff investments. The amount is about half of what Picard had hoped to recover from them. Katz and Wilpon did not admit any wrongdoing and are released from further claims or litigation. They agreed to pay out the $162 million over five years.

"This settlement represents the best possible outcome," Sheehan said.

The agreement, negotiated with the help of former New York Governor Mario Cuomo, was announced Monday morning, moments before the trial of Katz and Wilpon was to begin in federal court in Manhattan. The list of potential witnesses included Hall of Fame pitcher Sandy Koufax, a friend of Wilpon's who took his advice and invested with Madoff.

"This entire trial would have turned on the question of whether the Mets owners, who had dealt with Madoff for many years, knew or should have known the returns they were getting on their investments were simply too good to be true," said Robert Mintz, a former federal prosecutor now in private practice at McCarter and English LLP in Newark.

Picard had argued Katz and Wilpon were willfully blind to Madoff's Ponzi scheme. The Mets owners have said they knew of no red flags. They now have three years to begin making payments, which the agreement says must be completed in five years.

"For the Mets owners I think the key here was putting to an end a high-risk gambit," said Mintz, the former prosecutor. "The unpredictability of placing this case before a jury was a risk that in the end they thought was too high to take."

Copyright 2012 ABC News Radio


Madoff-Mets Trial: Sandy Koufax, Baseball Hall of Famer, to Testify

Jim McIsaac/Getty Images(NEW YORK) -- Hall of Fame pitcher Sandy Koufax has been named as a witness in a trial over whether the owners of the New York Mets, Fred Wilpon and Saul Katz, knew of Bernard Madoff's Ponzi scheme when they withdrew approximately $300 million in profit from his firm.

The former pitcher for the Dodgers, first in Brooklyn and then Los Angeles, was a childhood friend of Fred Wilpon, a fellow investor in Madoff's firm, and is among a dozen witnesses submitted Tuesday by lawyers of the Mets co-owners, according to court documents.

Court-appointed bankruptcy trustee Irving Picard has filed over 1,000 lawsuits against former Madoff investors to reclaim billions of dollars of investments lost by the majority of other investors. He claims that the foreknowledge of investors such as Wilpon and Katz allowed them to withdraw enough money to come out way ahead of other losers. Picard's civil suit against the Mets owners, first filed in 2010, claims that the two knew or had reason to know of Madoff's illegal actions, but turned a blind eye in order to avoid their own loss and gain a "fictitious profit" of about $300 million.

Lawyers for Picard have attempted to block the testimonies of Koufax and three other witnesses claiming that the individuals have "high profile and impressive credentials," but do not sufficiently know whether the Mets owners had knowledge of Madoff's fraudulent activity.

Picard initially made efforts to force the owners to pay out as much as $1 billion, but U.S. District Court Judge Jed Rakoff narrowed the amount owed to no more than $386 million.

In a March 5 ruling, Rakoff stated that the owners must pay as much as $83 million, but a jury will decide as to another possible $303 million. Rakoff said that Picard must prove that Wilpon and Katz were "willfully blind" to Madoff's actions in the trial set to begin next week.

Arguing against Koufax's testimony, Picard's lawyers said, "The defendants clearly intend to attempt to improperly persuade the jury that they are 'good' because they associate with good people, or have done good works, and as such they cannot be guilty of anything as untoward as willful blindness to fraud."

In response, the defense's lawyers wrote that "the jury can conclude that it strains credibility to think that Mr. Wilpon would expose his oldest and closest friend to potential financial ruin -- for no benefit to Mr. Wilpon himself -- if he subjectively believed that Madoff Securities might be operating a Ponzi scheme."

Wilpon, close friend of Madoff, claimed in 2011 that he was the victim, having blindly trusted Madoff for 25 years. Madoff himself attempted to absolve the Wilpons of any blame in an interview with the New York Times.

The Madoff and Wilpon families have been close ever since Madoff's son, Mark, and Wilpon's son, Jeff, became friends in Roslyn High School on Long Island. Consequently, the Madoffs also became friendly with Wilpon's brother-in-law and business partner Saul Katz.

Bernie Madoff is currently serving a 150-year sentence for his $65 billion Ponzi scheme that he ran for 20 years.

Copyright 2012 ABC News Radio


Madoff Trader Pleads Guilty to 40 Years of Fraud

Bernard Madoff leaves federal court Jan. 14, 2009 in New York City. Mario Tama/Getty Images(NEW YORK) -- A former trader for Bernie Madoff has pleaded guilty to fraud and conspiracy charges that date to the 1970s, well before Madoff said he began his Ponzi scheme.  

David Kugel had been accused of playing a “critical role” in the crime.  Prosecutors said he conspired to commit securities fraud and bank fraud and falsified records for almost 40 years.  Madoff has said his scam began in the 1990s.

Kugel is the fifth former employee, including Madoff, to plead guilty and cooperate with the government.  

Irving Picard, the court-appointed trustee overseeing the liquidation of Bernard L. Madoff Investment Securities, has said Kugel “very likely was the architect” of Madoff’s fraudulent strategy in which clients were told their money was properly invested when in fact it was not.  

“Over the years,” Picard’s lawsuit against Kugel says, “Kugel structured the fraudulent trades which were allocated between the accounts held by BLMIS investors.”

Prosecutors say Kugel agreed to forfeit tens of billions.  In the two years prior to the fraud being exposed the Kugels withdrew millions from their accounts in what Picard calls “attempts by the Kugels to save some of their ill-gotten gains before the fraud was discovered.”

Kugel also agreed to settle civil charges filed by the Securities and Exchange Commission.

"Kugel helped Madoff maintain the elaborate and enduring facade that his clients were engaged in actual trading when in fact no such trading occurred," said George S. Canellos, director of the SEC's New York Regional Office. "Kugel withdrew millions of dollars of phony profits that he knew weren't from actual trading activity."

Copyright 2011 ABC News Radio


Madoff Family Book's Profits Spark Anger from Victims

Mario Tama/Getty Images(NEW YORK) -- Andrew and Ruth Madoff, the son and wife of convicted Ponzi schemer Bernie Madoff, will not receive any money from a new book about the Madoff family in which they participated. But Catherine Hooper, the woman who's been engaged to Andrew and living with him for the past three years, will profit from the project, which angers some of the victims of Bernie Madoff's multi-billion-dollar investment fraud.

"I personally do not feel that any profits from the new book should in any way go to Ms. Hooper, who is future Madoff family, or should any other member of the Madoff family benefit from this crime," Lynn Sustak, whose retirement savings were wiped out due to Madoff, told ABC News. She and her husband invested with Bernie Madoff starting in 2003.

"All Madoff money should be donated to the real victims -- of course," another victim, Marcia Cohen, wrote in an email to ABC News.

Alexis Neely, the founder of the Family Wealth Planning Institute, told ABC News it was "smart" for Hooper to receive profits, and not Andrew or Ruth Madoff. Andrew Madoff faces a multi-million-dollar lawsuit from the trustee appointed to recover money for victims of the investment fraud.

"It would be a pretty bad idea for her to marry him at this point," said Neely.

"If it wasn't intentional it was a happy accident," added Neely. "But I would imagine it was intentional. It's definitely asset protection I would advise my clients to put in place in a similar situation."

Hooper, reportedly the driving force behind the book within the Madoff camp, is the only person associated with the Madoffs who will receive profits from Truth and Consequences: Life Inside the Madoff Family, written by journalist and author Laurie Sandell and based on interviews with Andrew and Ruth.

Hooper moved in with Andrew and became engaged to him just weeks before December 10, 2008, when Bernie confessed what he'd done to sons Andrew and Mark and they turned him in to the FBI.

After witnessing the backlash against Andrew and Mark, Hooper allegedly conceived the idea for the book. Mark Madoff committed suicide on Dec. 10, 2010, the second anniversary of the collapse of the fraud.

While Bernard Madoff is serving a maximum sentence of 150 years in a federal prison in North Carolina, a number of Madoff family members are being sued by a court-appointed trustee liquidating Madoff's business. The suit, filed in October 2009, seeks at least $198.7 million from Madoff's brother, sons, and niece. Andrew Madoff is named in the suit for allegedly having over $60 million in fraudulent transfers from Bernard L. Madoff Investment Services.

Stephanie Mack Madoff, the wife and widow of Mark Madoff, has been the only other Madoff to write a book and tell her story. She released a book earlier this month, The End of Normal: A Wife's Anguish, A Widow's New Life, released in October by Blue Rider Press.  

Bruce Hector, 68, a victim of the Madoff scheme, said he felt sympathy for the Madoff family and said their claims of innocence and ignorance of Madoff's fraud scheme seemed credible.

"The family has to live with their name the rest of their life," Hector, a physician, said. "The Madoff name is going for the remainder of this century to be associated with scandal. And those kids have got to live with that. I can sympathize with that. If they make a little money on a book, who cares."

Another Madoff victim, Neil Friedman, said he was also more concerned with the "injustice that victims have been subjected to by the trustee, Securities Investor Protection Corporation, and the government."

"I believe that the family, if innocent, has the right to make money telling their story in a book," Friedman wrote in an email to ABC News.

Copyright 2011 ABC News Radio


Bernie Madoff's Boastful Letter to Angry Daughter-in-Law

Mario Tama/Getty Images(NEW YORK) -- After being convicted in June 2009 of orchestrating the largest Ponzi scheme in American history, disgraced financier Bernie Madoff was sentenced to 150 years in a North Carolina prison.

But his daughter-in-law, Stephanie Madoff Mack, the wife of Madoff's oldest son Mark, felt he hadn't suffered enough. Mack wrote him a letter laying out the life he was missing, with details about the young grandchildren -- Mack's daughter Audrey and son Nicholas -- he would never see again.

The letter focused on "things that he would love to be part of, and now would never be part (of)," Mack said. "So I thought that that would really sting him."

But Mack said her plan backfired. Madoff's response, she said, sickened her. He described his life at Butner Prison -- which is considered a "crown jewel" of the federal prison system and is known for its college campus-like feel -- as one filled with "loads of friends" who respected him.

He wrote, "As you can imagine, I am quite the celebrity, and am treated like a Mafia don. They call me either Uncle Bernie or Mr. Madoff. I can't walk anywhere without someone shouting their greetings and encouragement, to keep my spirit up. It's really quite sweet, how concerned everyone is about my well being, including the staff...It's much safer here than walking the streets of New York."

Mack said she was "smokin' pissed" and didn't show her letter to her husband Mark, who was already tortured by his father's unimaginable duplicity.

On Dec. 11, Mark Madoff committed suicide. His dead body was found hanging from a ceiling beam.

"My husband was in terrible, terrible pain," Mack said. "He was so deeply hurt by it all, that he just, he, he just couldn't move past it."

Mack has written a book on her life as a Madoff, The End of Normal: A Wife's Anguish, A Widow's New Life, published by Blue Rider Press.

Read more about Mark and Stephanie Madoff here and watch the full story on ABC’s 20/20 Friday at 10 p.m. ET.

Copyright 2011 ABC News Radio


Madoff Widow Blames Bernie for Son's Suicide Attempts, Death

ABC News(NEW YORK) -- While many lost their fortunes thanks to Bernie Madoff -- the man who orchestrated the largest financial fraud scam in U.S. history -- Stephanie Madoff Mack lost her husband. Now, the widow of Mark Madoff, Bernie Madoff's oldest son, is the first inside member of the Madoff family to speak out, divulging the story of the death that she says can be traced directly to Bernie Madoff's deception.

In a searing and emotional interview to be broadcast Friday on ABC’s 20/20, Mack details how a privileged life in one of the richest families in America turned into a living nightmare after Madoff's Ponzi scheme was uncovered. Mack says the ordeal led Mark Madoff to commit suicide last December, on the two-year anniversary of his father's arrest. Mark had first attempted suicide in 2009, Stephanie reveals for the first time.

"He couldn't get out, he was so betrayed and so hurt by Bernie," she said.

"I hate Bernie Madoff," Stephanie said. "If I saw Bernie Madoff right now, I would tell him that I hold him fully responsible for killing my husband, and I'd spit in his face."

Mack has written a book on her life as a Madoff, The End of Normal: A Wife's Anguish, A Widow's New Life, scheduled for release this week by Blue Rider Press.

Stephanie, then 30, married Mark Madoff, the handsome and wealthy 40-year-old divorced father of two, in October, 2004. In attendance at their Nantucket Island wedding were many investors in Bernie Madoff's fraudulent hedge fund.

"He stood there in the corner at my wedding watching everyone dance, and he knew that everyone in that room was going to get screwed," said Mack.

The couple went on to have two children: a daughter, Audrey, and a son, Nick.

With Mark's blessing, Stephanie changed her last name to Mack to spare her family the stigma of that now reviled name. Today, her children are healthy and happy and Mack says she intends to keep them that way.

"I will never let it define my two children for the rest of our lives," she said. "The rest of my life is going to be a happy one, and not filled with deceit, and lies, and betrayal, and sorrow, and I hold onto that hope."

Watch the full story on ABC's 20/20 Friday at 10 p.m. ET.

Copyright 2011 ABC News Radio


Bernard Madoff's Yacht for Sale

Mario Tama/Getty Images(NEW YORK) -- Ponzi schemer Bernard Madoff bought a lot of nice things with his tainted money:  luxury homes, sparkling jewelry, exotic cars.  But his yacht, named "Bull," may have been the most extravagant -- and now it's up for sale at a steep discount.

The 90-foot powerboat -- currently docked in southern France -- cruises at 33 knots, has six berths and monogrammed towels.

It was built to Madoff's specifications at a cost of more than $8 million, but can be yours for half that.

The sales agent says the "yacht's association with the largest swindle of the 20th Century makes it almost a piece of American heritage."

Copyright 2011 ABC News Radio

ABC News Radio