Bloomberg News

N.Y. Mets Owners Must Show Madoff Money Was Taken in Good Faith

March 15, 2012

The New York Mets owners must prove at a trial set for next week that they were acting in “good faith” and didn’t suspect fraud when they received $303 million from Bernard Madoff’s Ponzi scheme, a judge said.

The team owners face a trial starting March 19 over whether they suspected fraud when they withdrew as much money as they put into Madoff’s brokerage in the two years before his 2008 arrest.

A key issue in the trial is whether they acted in good faith, and they have the “burden of proving” they didn’t “willfully” blind themselves to the con man’s scheme, U.S. District Judge Jed Rakoff said in an order filed yesterday in federal court in Manhattan.

Rakoff said he made the ruling in response to questions from lawyers for the Mets owners and the Madoff estate. They asked at a March 9 court conference whether the plaintiff is required to prove willful blindness. Rakoff said he would give his reasons in a “forthcoming” opinion explaining other rulings in the case.

Rakoff ruled on March 5 that the Mets defendants must give up as much as $83 million in fictitious profits from Madoff’s Ponzi scheme and face a trial over whether they acted in bad faith, a decision that could cost them $303 million more, he said.

The trial is over what remains of a $1 billion lawsuit by Madoff trustee Irving Picard against Mets owners Fred Wilpon, Saul Katz and a group of related defendants.

Madoff, 73, pleaded guilty in 2009 to orchestrating what prosecutors called the biggest Ponzi scheme in history, and is serving a 150-year sentence in a federal prison in North Carolina.

The case is Picard v. Katz, 11-cv-03605, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net Linda Sandler in New York at lsandler@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net


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