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U.S. District Judge Jed Rakoff stated in an order last Wednesday that the owners of the New York Mets, in order to pay reprisal to investors in Bernard Madoff’s fraud, will be forced to pay noless than $386 million for turning a blind eye towards the ex-financier’s scheme.
The sum of money will cut more than $600 million from the $1 billion award requested in a lawsuit against the team for allowing the fraud to happen. Rakoff said, according to an article posted on Time magazine’s website, that $83.3 million of that money is the assumed profits collected by the Mets’ owners in the two years before a bankruptcy court filing occurred.
Also, the payment includes more than $300 million in principal that the Mets received during the two-year period. Rakoff also stated that Irving Picard, the court-appointed trustee on the case, could only recover principal if it could be proven that the Mets’ owners knew about the fraud, and allowed it to continue.
This is because the lawsuit claimed the owners either knew or should have known that Madoff was operating this scheme. Lawyers for the Mets owners have said, on numerous occasions, that the defendants had no idea that Madoff was operating this huge scheme with the money that their organization invested.
Picard has filed more than 1,000 lawsuits in order to recover billions of dollars lost by investors in Bernard Madoff, according to Time magazine. Picard argued that some investors, like the Mets’ owners, owe large sums of money to other investors because they withdrew from them enough to make a larger amount of money at the expense of others.
Bernard Madoff, the 73-year-old ex-financier, is serving 150 years in prison after pleading guilty to fraud charges. He revealed the lengthy scheme in December 2008 after telling investors their money was worth as much as $68 billion. However, there was only a fraction of their $20 billion dollar investment left.
The New York Mets’ owners announced in May had agreed to sell a minority share to hedge fund manager David Einhorn for $200 million, but the deal fell through on September 1st. The Mets said they would seek to sell shares of up to $20 million to family members and other potential investors without risking the possibility of losing a controlling interest.
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