NY Mets and JP Morgan Sued for Alleged Ties with Madoff
Bernie Madoff bankruptcy trustee Irving Picard, who is attempting to recover assets for the victims of Madoff’s illustrious ponzi scheme, has sued the New York Mets and JP Morgan Chase for their roles in connection with the scheme.
The suit seeks $300 million from the New York Mets and claims that at least $94 million in fictitious profits were used by Mets owners Fred Wilpon and Saul Katz to help fund the team’s everyday business operations, and also used for their real-estate investment company, Sterling Equities Associates.
According to the lawsuit, Wilpon and Katz, along with their associates, turned a blind eye to the obvious warning signs surrounding business with their Madoff money and failed to investigate questions about Madoff’s credibility even when they had all the resources to do so.
Wilpon and Katz deny all allegations, retorting that the lawsuit is “an outrageous ‘strong arm’ effort to try to force a settlement by threatening to ruin our reputations and businesses which we have built for over 50 years.”
Wilpon and Katz aren’t the only ones worried about their reputation that come from ties with the Madoff case.
JP Morgan Chase, sued for $6.4 billion, faces potential damages to its name and to its stock with the lawsuit, according to JMP Securities analyst David Trone. The lawsuit alleges that JP Morgan, like Wilpon and Katz, didn’t take any action in response to the bank’s employees’ expressed concerns about Madoff. Worse, the suit alleges that JP Morgan actually had some suspicions about the legitimacy of Madoff’s returns, yet it tried to make money by offering financial products tied to the scheme. Like Wilpon and Katz, JP Morgan claims it “did not know about or in any way become a party to the fraud orchestrated by Bernard Madoff.”
It is hard not to sigh at these allegations and wonder what could possibly be next. The legal system will do what it can to sort out this mess but the fact remains that, sometimes, human nature and money are a toxic combination.