The owners of the New York Mets managed investments for others in Bernie Madoff‘s Ponzi scheme and threw some interesting conditions on participation: the investors, which included Larry King, Sandy Koufax and Tim Teufel, could have no interaction with Madoff and ask how he generated such impressive returns.
The New York Times went through the allegations in the clawback lawsuit filed against Sterling Equities, the investment firm owned by Wilpon and Katz, and a prime player in the finances of the Mets. According to lawsuit filed by the trustee seeking upwards of a billion dollars from Sterling Equities, Wilpon and Katz were far more involved with Madoff than previously thought and specifically guarded access to Madoff. From the Times:
Mr. Madoff was their treasured secret, and Sterling partners were going to run the show. They also screened out those who they thought might present problems, according to the lawsuit. Certain types of more sophisticated investors — those who might have wanted to engage Mr. Madoff about his strategy and his handling of their fortunes or more modest savings — were kept out.
“Far more outsiders were turned down than actually got into the elite pool of Madoff investors through Sterling,” the lawsuit said, adding that it was Mr. Katz who finally determined which people were approved for accounts.
The woman who had several accounts with Mr. Madoff said that when her husband was discussing investment opportunities with the two Sterling partners over lunch, they asked him whether he knew much about investing. The answer was that he did not, and looking back now, she wonders about that question.
Larry King’s accountant, David Blouin, said in an e-mail that he found it “highly unusual” that he was unable to talk to Mr. Madoff and that “this lack of transparency” made him skeptical, which he relayed to Mr. King.
Now, keep in mind these are allegations denied by the Wilpon camp. Most of these investors, like Koufax and King, didn’t profit enough to be on the trustee’s radar; Teufel, sadly, did; the former Mets player and current manager of the Buffalo Bisons (Class AAA; International League), did.
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