Madoff Trustee Plans Wave Of Lawsuits Against Ponzi Scheme ‘Winners’

Jul 26 2010 | 12:27pm ET

The receiver in the Bernard Madoff Ponzi scheme may sue as many as 1,000 investors who withdrew more money than they invested with the fraudster.

Irving Picard told The Wall Street Journal that he could sue half of the so-called “net winners” from the scam—those who withdrew false profits generated by the Ponzi scheme. There are about 2,000 such “winners,” according to Picard, who has until December—the two-year-anniversary of Madoff’s arrest—to file the suits.

“We’re not going to wait until the last minute,” Picard told the Journal.

The receiver last year sent letters to hundreds of the “winners,” asking them to “resolve this matter amicably” by returning some of the money they withdrew. But he found few takers.

“What am I supposed to do?” Picard, who has already recovered $1.5 billion of the $65 billion Madoff stole. Picard also has lawsuits seeking another $15 billion pending, filed against Madoff’s family members, feeder funds and biggest investors.

“If I gave [the net winners] an options to come talk to me, why didn’t they?” Picard asked.

Some of those “winners” interviewed by the Journal said they would fight Picard’s efforts. Adele Fox, a retired school secretary who Picard wants to repay almost $700,000, said, “this is my money that I need now, and if he comes after me, I will be penniless.”

Picard said he has offered to exempt “winners” who can show a financial hardship. But fair’s fair, he said.

“The people who made money, who got  more, have made money at the expense of the people who didn’t,” he said.


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Cooper-Hohn Won't Contest Divorce Settlement

Dec 18 2014 | 9:51am ET

The ex-wife of hedge fund billionaire Christopher Hohn will not contest a divorce...

Guest Contributor

Alternative Investment Funds Face A Communications Imperative

Dec 19 2014 | 6:10am ET

A handful of the top alternative investment firms on both sides of the Atlantic...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.