Did you get a letter from Irving? You’re in trouble

The Daily Beast reports that Madoff friends and family members withdrew $735 million from Madoff Investments in the 90 days before the Ponzi fellow confessed all, leading that trustee, Irving Picard, to suspect that Bernie wasn’t the only person who knew about the fraud. So he’s sent out claw back letters to those active customers.

The timing of those withdrawals prompted Irving Picard, the bankruptcy trustee, to send “clawback letters” in mid-April to 223 people among the more than 8,000 investors who had accounts with Madoff. What this shows is that the bankruptcy trustee is not randomly trying to recover money from every Madoff investor—he’s looking for people who may be culpable.

“If you were a close relative of Bernie or Ruth, you got a letter,” said David Sheehan, who is a leader of Picard’s legal team at Baker, Hostetler.

In an exclusive joint interview with The Daily Beast, Sheehan and Picard explained that the clawback letters asked for a return of the cash and an explanation of why the withdrawals occurred. “People who got the letter are in one way or another” related to people somehow linked to Madoff’s investment advisory service, said Sheehan.

The rapid pace of withdrawals in the three months prior to Madoff’s arrest Dec. 11, 2008, “raised our level of concern that the monies were paid purposefully,” said Sheehan.

Well yes, I guess it would. Then, for Walter fans, there’s this:

Picard and Sheehan also said they expect to file more lawsuits this week seeking recovery of hundreds of millions of dollars from some of the major money managers who had billions of dollars invested with Madoff. The bankruptcy trustee is clearly not buying the argument that the money managers are victims, too.

Among those in Picard’s sights, but not yet sued: the Fairfield Greenwich group, which lost $7.5 billion with Madoff; Tremont Group Holdings, which dropped more than $3 billion; and Maxam Capital, a $280 million loser.

10 Comments

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10 responses to “Did you get a letter from Irving? You’re in trouble

  1. mailbox blues

    noel painted his mailbox blue because that is how he feels every 2:30 pm when the postman drives north on rhr past his box at 175

  2. can't wait

    go get em picard

  3. crow

    it is what noel wife serves for dinner

  4. 6 month rapster

    It’s been 6 months since Dec 11

    and I still have no pics of the Noel 7

    But they ain’t stressin’

    cause Walt ain’t confessin’

    Can’t wait to see Tues May 12 9 pm PBS Frontline

    since it will show us Noel’s been up to a crime!

    Fizzaaam.

  5. Walt

    Chris, Chris, Chris:
    Irv’s got nothing. He can write all the letters he wants. At $750 per hour, I would write lots of letters as well. You said it in the last paragraph, Dude. The money is lost. Gone. Elvis has left the building. There is no money to get back. Get it? So stop with this clawback nonsense. It is not going to work. There is a reason he has not sued FGG. We did nothing wrong. I keep telling you – we really did NOTHING!! And that is not a crime.
    You get it yet?
    Anyway.
    I have been busy enjoying my golden years. So I have been out and about. i beed to get caught up on all this Bourke and Dent stuff. Lot’s happening. So lay off old Walt and post on this new stuff.
    WORM!!!!!
    Your Pal,
    Walt

  6. edgewater

    i don’t know why the trustee isn’t going after everyone who at anytime got any madoff money OUT of the scheme. those funds were stolen funds and they don’t lose their character as stolen funds just because the recipient is unaware of the crime. just as the owners of art looted by the nazis have to give it up to the rightful owners [and, eventually, even the british museum will be giving up its antiquities from egypt], the ‘innocence’ of the current holder is no defense to the claim of ownership by the victim of the theft.

  7. Fake Walt

    I performed extensive due diligence, including regular monitoring of Madoff’s trading activity. if the S.E.C. didn’t spot Madoff’s fraud, why should I have? I have the same qualities in Greenwich that people thought were charming, and then when it got upped by all the money and my grand lifestyle, people got jealous. I still have the money for a truly lavish lifestyle that includes vacation houses in Palm Beach and Southampton and on the Caribbean island of Mustique.

    Off to Majorca

    Kind regards,
    Fake Walt

  8. Tune in tonight!

    Folks, don’t forget to watch Frontline tonight.

  9. Cos Cobber

    I respectfully disagree Edgewater. When you receive antiquities or art you are receiving something with a chain of title. It’s a tangible and often unique item that is completely traceable. Savvy collectors should have some concern at the time of the purchase that the art may have come about via an illegitimate channel.

    Cash on the other hand is a fungible item that is often used as quickly as it is received. If a claw back is fair game, then where do you draw the line? How about wages? How about your wages at your current place of work? What about your retirement assets; stock dividends, etc. How about a money market fund that implodes tomorrow for fraud that you sold out of two years ago.

    On the other hand, I think Picard’s efforts to tie up friends and family makes complete sense. Tie up the assets until due process can make a determination as to who knew what and when. Anyone that can be proven to have any knowledge of the fraud will have to repay no matter the stress it brings to their own personal finances.

    Those that had no clue cannot be expected to repay. Those dollars have been reallocated and therefore, for many they would be punished twice by having to return their funds.

    Just think about all the craziness we could have if claw backs could be applied in any fraud case.