Since the 2008 revelation that Bernie Madoff’s wildly profitable investment business was all just smoke and mirrors, the owners of the New York Mets have claimed they were one of the victims of the Ponzi scheme. However, a newly unsealed lawsuit says that the Mets owners not only ignored warnings that Madoff was too good to be true, but that they made hundreds of millions off the scheme.
In a sweeping 365-page lawsuit unsealed on Friday, the trustee, Irving Picard, said the partners at Sterling Equities, including the Mets’ Fred Wilpon, “were simply in too deep — having substantially supported their businesses with Madoff money — to do anything but ignore the gathering clouds.”
Picard said the baseball team itself had 16 Madoff accounts from which it withdrew more than $90 million of bogus profits to fund day-to-day operations.
“There are thousands of victims of Madoff’s massive fraud,” states the lawsuit. “But [Sterling co-founder] Saul Katz is not one of them. Neither is Fred Wilpon.”
Meanwhile, the NY Times has a detailed list of ignored warning signs about the Ponzi scheme going back to 2002.
In addition to seeking the return of the $300 million, the suit could end up going after Sterling for over $1 billion because of what the trustee sees as willful negligence.
Wilpon and Katz issued a statement calling the allegations “an outrageous strong-arm effort try to force a settlement by threatening to ruin our reputations and businesses.”
Last week, Wilpon announced he would consider selling minority ownership shares in the Mets.