(NEW YORK) — The owners of the New York Mets agreed Monday to pay $162 million to settle claims that they willfully ignored the Ponzi scheme orchestrated by Bernie Madoff.
“We believe that this is a fair and just settlement,” said David Sheehan, chief counsel to Irving Picard, the court-appointed trustee recovering money on behalf of Madoff’s defrauded clients.
The trustees had demanded six years of “fictitious profits” that team owners Saul Katz and Fred Wilpon allegedly earned from their Madoff investments. The amount is about half of what Picard had hoped to recover from them. Katz and Wilpon did not admit any wrongdoing and are released from further claims or litigation. They agreed to pay out the $162 million over five years.
“This settlement represents the best possible outcome,” Sheehan said.
The agreement, negotiated with the help of former New York Governor Mario Cuomo, was announced Monday morning, moments before the trial of Katz and Wilpon was to begin in federal court in Manhattan. The list of potential witnesses included Hall of Fame pitcher Sandy Koufax, a friend of Wilpon’s who took his advice and invested with Madoff.
“This entire trial would have turned on the question of whether the Mets owners, who had dealt with Madoff for many years, knew or should have known the returns they were getting on their investments were simply too good to be true,” said Robert Mintz, a former federal prosecutor now in private practice at McCarter and English LLP in Newark.
Picard had argued Katz and Wilpon were willfully blind to Madoff’s Ponzi scheme. The Mets owners have said they knew of no red flags. They now have three years to begin making payments, which the agreement says must be completed in five years.
“For the Mets owners I think the key here was putting to an end a high-risk gambit,” said Mintz, the former prosecutor. “The unpredictability of placing this case before a jury was a risk that in the end they thought was too high to take.”
Copyright 2012 ABC News Radio
Julia Horowitz, CNN
Ivaylo Vezenkov and Lauren del Valle, CNN
Erin McClam, CNN
Paul Menser, BizMojo Idaho