Trusting investors who were swindled by Bernie Madoff’s tempting promises of higher-than-market-rate returns are now reduced to fighting over what’s left of the con man’s $50 billion empire.
Irving Picard, the court-appointed trustee in charge of recovering money for Madoff victims, says he will file a wave of new “clawback” lawsuits against hundreds of individuals, including Madoff’s brother and sons, who withdrew more money than they invested before the firm collapsed in 2008 – when Madoff was arrested for fraud.
“The people who made money, who got more, have made money at the expense of the people who didn’t,” Picard told the Wall Street Journal. Under federal bankruptcy law, he has the power to redistribute any remaining funds equitably among Madoff’s 2,000 victims, which include Senator Frank Lautenberg and film director Steven Spielberg.
The lawsuits have to be filed by the December deadline. Picard has already recovered about $1.5 billion from Madoff’s Ponzi scheme. He’s also filed a $3.6 billion suit against Fairfield Greenwich Group, claiming the hedge fund “enabled” Madoff to hide his fraudulent behavior for two decades.
If Picard is successful, Fairfield Greenwich founder Walter Noel may be forced to sell his $42 million mansion, his $9.4 million Southampton summer home and his 18,000-square-foot villa in Mustique. “Every dollar the defendants purportedly ‘earned,’ and every dollar they kept to unjustly enrich themselves, was stolen money,” Picard said.
He accused Noel and his main business partner, Jeff Tucker, a former SEC attorney, of each wrongfully pocketing $114 million of Madoff profits even though they were “acutely aware of many facts and red flags.”