The New York Mets baseball team and their business partners must pay the victims of Bernard Madoff up to $83 million, and also face trial on charges the knew of Madoff's fraud over many years but did nothing.
According to the New York Times, a four-page ruling by federal district court judge Jed S. Rakoff also effectively clears the way for a jury to decide whether Mets owners Fred Wilpon and Saul Katz, who invested about $1.6 billion with Madoff over two decades, were: "innocent victims of a man they considered a friend and a financial whiz;" or "sophisticated investors who, in myriad ways over many years, were shown evidence that Madoff’s returns were too good to be true, alarms they chose to ignore or discount because they and their businesses had grown too dependent on their Madoff profits?"
In order to retrieve some or all of the $386 million that bankruptcy trustee Irving Picard is seeking to repay victims of Madoff's Ponzi scheme, Picard must convince a jury that the defendants willfully ignored warning signs that Madoff was operating a fraudulent enterprise, the Wall Street Journal reported.
A trial is set for March 19 in Manhattan.
The judge has already agreed with Picard that alleged fictitious profits the Mets received in the two years before the fraud came to light should be returned to the bankruptcy estate.
Picard is claiming that $83.3 million is owed, but Rakoff said "the exact amount" will be determined at a later date.
Picard had initially sued the club's owners and their business partners for $1 billion.
Katz and Wilpon have repeatedly said they were victims and had no inkling that Madoff was running a scam, the WSJ wrote.
"We look forward to demonstrating that we were not willfully blind to the Madoff fraud," the WSJ quoted their statement as saying.
Rakoff has also said that he "remains skeptical that the trustee can ultimately rebut the defendants’ showing of good faith," and claim back the full amount he is seeking.
Nearly 5,000 investors were deceived in the fraud by Madoff.
According to the Associated Press, the former NASDAQ chairman told them that their $20 billion investment had grown to $68 billion by November 2008. Only weeks later, he revealed his fraud and said he had only several hundred million dollars left.