Lisa Chow is the economics reporter at WNYC. She tries to explore in her stories surprising aspects of New York’s many economies—in plain view or hidden, in neighborhoods or sectors.
Mets Owners Knowingly Made $300M Off Madoff Scheme, Trustee Says
Friday, February 04, 2011
The owners of the New York Mets turned a blind eye to Bernie Madoff's Ponzi scheme, reaping about $300 million in phony profits from that were used to fund the day-to-day operations of the baseball team, documents unsealed in a Manhattan court accused on Friday.
"There are thousands of victim's of Madoff's massive Ponzi scheme, but [Mets' president] Saul Katz is not one of them. Neither is [Mets' CEO and Chairman] Fred Wilpon," said Irving Picard, the trustee appointed to record funds for Madoff's burned investors, in a 373-page complaint filed in December.
The two are brothers-in-law and partners at Sterling Equities. Wilpon and Katz have called the suit "an outrageous strong-arm effort to force a settlement." They say they were victims of the fraud.
The complaint also names Mets’ chief operating officer Jeff Wilpon and others connected to the Mets and Sterling Equities as defendants.
Fred Wilpon, Katz and their partners at Sterling Equities had 483 accounts with Madoff, and the money ran through every aspect of their business, including their baseball team and real estate assets, the suit alleges. The lawsuit also alleges the Mets' owners used that money to secure hundreds of millions in loans and lines of credit.
The Madoff trustee accused the defendants of ignoring red flags, such as a warning from a consultant who said he "couldn't make Bernie's math work and something wasn't right."
The suit has cast a cloud over the Mets ownership, which has said it's exploring a partial sale of the team.
Madoff is serving a 150-year prison term.