A panel of federal appeals court judges yesterday tossed skeptical barbs at lawyers for the Mets owners and hundreds of other investors who made money from Bernard Madoff’s epic Ponzi scheme.
The mega-crook’s ex-clients are challenging a Bankruptcy Court ruling that invalidated their final account statements and said they can’t seek any compensation if they withdrew and pocketed more than their original investments.
During lengthy arguments at the Second Circuit Court of Appeals in Manhattan, Chief Judge Dennis Jacobs said it sounded like the investors wanted to recoup “whatever amount Madoff made up chewing on a pencil and looking at the ceiling.”
Judge Pierre Leval likewise said the question appeared to be “whether accounts should be valued on false statements based on flights of the imagination.”
Mets lawyer Karen Wagner said the investors’ position was “consistent” with a previous ruling in another case involving a phony mutual-fund scam.
Wagner also said the “whole system” of compensating victims of securities fraud “is dependent on the customer statements.”
“If the statement can be followed, it should be followed,” she said.
Lawyer David Sheehan, representing bankruptcy trustee Irving Picard, argued that Madoff’s $65 billion Ponzi scheme was a “zero sum game,” and that any payouts were made with “other people’s money.”
Sheehan also said Picard hoped to recover more than the roughly $20 billion in actual losses by suing over “the damages inflicted by those who profited by the fraud.”
Among the spectators in the packed courtroom was former Gov. Mario Cuomo, recently appointed to mediate Picard’s $1 billion suit against the Mets owners.
Cuomo declined to comment on the arguments, but said their complexity demonstrated the need to try and settle the Mets suit out of court.
“We are working on it every day,” he said.
(Source: NY Post)
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One Response
what i don’t understand about this whole mess is as follows . how come no one wants to challenge Irving Picard in court . the scc sighned off on everything from Bernard Madoff , the us goverment said he was kosher what more do you need.