Trustee: Mets Owners Went ‘Shopping’ For Madoff Fraud Insurance

NEW YORK (CBSNewYork / AP) — A court-appointed trustee says the owners of the Mets reaped profits from Bernard Madoff’s financial Ponzi scheme even as they went “shopping” for insurance to protect themselves in case the scam collapsed.

WCBS 880’s Paul Murnane: Were The Mets In The Know?

Trustee Irving Picard says partners in Sterling Equities, which includes Saul Katz, Fred Wilpon and his son Jeff, contacted a broker to ask about insuring their account with Madoff in February 2001. In one handwritten note, court records say partner Arthur Friedman wrote the insurance should cover “fraud or fidelity” with the word “Ponzi” in parentheses. Picard filed the court documents Thursday.

“They didn’t go shopping,” Greg Nero, general counsel for Sterling, said according to the New York Daily News. “A trusted colleague made a recommendation about looking at insurance, so they spoke to an insurance salesman, received some basic information and they ultimately decided not to purchase it because they trusted Mr. Madoff – and believed that they did not need it.”

Picard claims Sterling partners knew Madoff was stealing from new investors to pay off older investors. He wants them to repay $1 billion to Madoff’s victims.

Sterling denies it knew about Madoff’s wrongdoing. In a written statement, the group said there were no “red flags and they received no warnings.”

The statement reads: “For months our reputations and our businesses have been subjected to the Trustee’s false allegations, and today’s filing recklessly rehashes the same fictitious claims.

“As the Partners have said all along, they did not know Bernie Madoff was engaged in a fraud. There were no red flags and they received no warnings. The Trustee’s opposition papers filed today say nothing different. The only thing the Trustee has debunked is the veracity of his own story.”

What do you think of the latest developments? Sound off in the comments below…

(TM and Copyright 2011 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2011 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

More from Paul Murnane
  • Jeff Wilpon

    Hey Dano, still think the Mets have money? Mets fire sale starts in July. Put your bids in now, all players will be available for trade. Looking for an overrated choker shortstop (Reyes), we have him.

    Looking for an overrated 3rd baseman who’s a choker (Wright), we have him. Looking for an overrated starting pitcher (Pelfrey), we have him.

    Looking for a high price pitcher once deemed for the Hall until he became a Met (Santana), we have him. Looking for a high price CF who never brought the Mets a title (Beltran) we have him. Looking for a LF who can’t homer in any ball park other then Fenway (Bay) we have him.

    All will come cheap, even for magic beans. All trades & sales are final.

    • Avi

      Hey, you forgot to mention all the injuries. Despite that and all your rants they have won only a couple of games less than the Yankees, who are probably your team. They are an 800 lb gorilla. The rules need to be changed. Besides, you’re wrong about all the players above. Jeter now worth 17M? Posada now worth 13M? A-Rod now worth 27M. Give me a break. Tampa Bay with a really low payroll and losing a bunch of stars through free agency and they are in first place and will finish ahead of them. Bosox finished with their bad start? now 1/2 game behind the Yankees. Big deal, the Mets are looking for a minority partner. The Steinbrenners have had minority partners since the day they purchased the Yankees. Get real!

      • Jeff

        Avi, the Yankees have won with those players, 5 titles. Have the Mets won with the players listed & having a payroll of $150 mil a year? You say you’re a CPA, add that up?

        While you’re at it, add this one , with the billions the Mets have spend the last 25 yrs on free agents, why haven’t’ they won? It’s not a trick question Avi, even someone stupid like you can answer the question.

        Must be tough being a Mets fan.

  • dabooch

    Big money went shopping in a limited store for big returns. The clients were reaping the benefits for years so why would the hair on the back of their necks stick up and a sixth sense tell them it’s time to insure as well as bail?

  • shop online

    i like this site and articles

  • Peter

    the wilpons are guilty as charged !!!

    • Avi

      You’ll never get on a jury, at least I hope not. They haven’t even been charged so how can they “guilty as charged.” . An advisor suggested they shop for insurance. which they did not obtain. If they were so certain it was a scam then why didn’t they get the insurance. If anything, this proves that they did NOT know it was a scam. This sleaze-ball trustee/lawyer who stands to gain so much just throws out sensational headlines which naiive people like you automatically believe.

      • chris

        Your lost loser

  • Jerry Elhai

    The trustee allegations that the Wilpons looked for insurance on their Madoff money in 200 1 proves that tha Wilpons did not know that Madoff was running a Pozi scheme, for two reasons. One they did not purchase the insurance and even more importantly if they felt it was a scheme in 2001 why would they leave all that money there untill the scheme went bust? The trustee is picking on a high profile target to make money and a name for himself without regard to who he hurts.

    • chris

      You are a very evil person. the only reason why they didn’t buy the insurance was if they did it would have been a slam dunk that they were involved, so they chose not to buy based on that. Anyone who really looks at it objectively can see that. These wilponzi’s had to pay back money in the 90’s as well for a ponzi scheme they were involved in, did you know that buster. You are pathetic! Innocent peole lost their life savings based on some billionairs greed. I applaud Piccard for his work!

  • Kevin

    anyone who is looking for “fraud insurance” and is under the gun in the Madoff scheme should go before a court and state whether or not they had an idea. Instead of shopping for “fraud insurance” they could have allocated the singular assets elsewhere.which meant they would not get the ponzi guarantee.

    Sorry, but these guys are in serious trouble and I am rooting for the Mets this weekend.

  • Avi

    So now you guys are convicting the Wilpons without having them tried. They of course were foolish to not spread their investments around. As a practicing CPA for many years, I can vouch that even high-income clients don’t always pay attention to details they should. I frequently play devil’s advocate and present the worst-case scenario. Why isn’t the blame being placed on the bureaucrats in the government who are supposed to be watching for things like this. They were even warned years ago but still did not look into it. I still say the Wilpons are being treated very unfairly. If they will be tried and convicted, which I doubt, then we will know the accusations were true. Do you think they were the only sophisticated investors who were affected by this. Why aren’t you guys saying anything about this trustee/lawyer’s underhanded tactics. Did you know he is expected to reap between $300m-1B in fees from this fiasco. Where do you think this money will be coming from—right out of the potential refunds to the victims of the scam. Then he can give interviews, write books, etc. Why does he have the right to enrich himself at other people’s expense. Bernie Madoff should rot in hell.

    • chris

      You are also a very evil person! Blame the bureaucrats? What is wrong with you? What do they have to do with these men stealing and plotting to wrong innocent people? Your lost! Do we all need the government to be in our lives watching our every move? And you must be an out of work CPA because they are suing for 300 m to 1 bil of which most will go back to the people who lost their money with these slime balls. And yea Piccard will get paid for his work and rightfully so! But to say he’s gonna make in ups of 1 billion is completely wrong you loser!

      • Avi

        Gee, you figured out I am “evil” because you don’t agree with me, even though you don’t have any proof for your allegations. Why shouldn’t we blame the bureaucrats. They obviously didn’t do the job they were supposed to, even though they were warned several times. Don’t you know any history, that the Great Depression was caused by the lack of oversight and that’s why the SEC was created, to protect investors. How did you figure out I am out of work when in reality I have more than I can handle. Yes, somebody should be in charge to get the money back to the victims but our system rewards low-lives like this trustee/lawyer to make sensational headlines and then get way overpaid for it, cutting deeply into the refunds. None of the people who have known me for years and years and years has ever accused me of being evil yet you who only read a few sentences of what I said go out and accuse me of that. . Do you know the difference between being stupid and being ignorant. You probably don’t because your are both!

        P.S.: you really need to take an anger management course.

    • DCOnEdge

      This “trustee” cannot be trusted. He gets paid a percentage of the money he recovers for the victims, and that is why he is going after this $1 billion from the Wilpons – if he recovers that from them he will be “in the green.” This is just another scam on the victims!

  • looking for justice

    Come on. these dudes are all about the money. They new something was up but enjoyed all the green that was coming in. The fact that the word”Ponzi” was written down is the smoke to the fire. And this guy Mr.Picard is all about getting the money……mostly for himself and his firm.

  • Knock Knock

    It is not normal operating procedure to shop for insurance, especially, as they claim, with an investment adviser you trust so much. The prudent thing for them to have done was to spread the money around and diversify in case the investments or firm went belly up. They new, there is no doubt that they new these men are not idiots. Now the trustee has some proof and it is compelling proof.

  • Avi

    I am not sure if the Wilpons are gullty or not. Personally, I don’t think they are the kind of people who would knowingly get involved with a scam like this. One thing I am sure of is that this “court-appointed trustee” who tosses out allegations without any evidence at all is nothing more than a high-class sleazeball amubalnce chaser. Why doesn’t the court issue a gag order on this clown? Is it fair that he is prejudicing people, some who may be potential jurors, and not giving the potential defendants due process.

blog comments powered by Disqus
Giving Tuesday
Charles Osgood Event

Listen Live