Blog Entry

Report: Wilpons 'pathway' for Madoff investors

Posted on: February 21, 2011 3:47 pm
Edited on: March 3, 2011 5:56 pm

Koufax, Wilpon The Bernie Madoff saga just won't die, as more information continues to come out on how owner Fred Wilpon, son and COO Jeff Wilpon and president Saul Katz conducted business with the disgraced Ponzi king.

In a New York Times piece, it is revealed that those who invested through the Wilpons with Madoff were not allowed to speak to Madoff whatsoever. Everything was handled through the Wilpons' family company of Sterling Equities, as requested by Madoff. In fact, money would not be sent to Madoff directly; rather, it would be paid to Sterling, who would then pay Madoff through Sterling partner and Mets board member Arthur Friedman, who is a public accountant with a law degree.

Overall, Friedman oversaw 178 Madoff accounts opened for friends business acquaintances and Sterling employees while also having a hand in 305 other accounts set up by Sterling partners for personal use. Friedman would be in regular contact with Madoff's firm weekly, even daily, dealing with Frank DiPascali who has pleaded guilty to assisting with Madoff's fraud.

The Wilpons may have believed they were doing these friends and employees a favor, as someone with Madoff accounts through Sterling told the Times .

"You could not get [a Madoff account] any other way," he said. "Sterling was the pathway in."

Another Sterling employee, David Diamond, confirmed that the Wilpons were extremely high on Madoff and was considered to be a "miracle worker."

"The employees at Sterling, based on their net worth and their income, would never have had access to Bernie on their own," Diamond said. "It was made clear to the employees that because of Sterling’s relationship with Madoff, they were giving us a special consideration."

Those considerations ended up burning the investors.

"We never questioned the fact we weren’t allowed to contact Madoff because of our confidence in Sterling," a woman with Madoff accounts said. "We invested because we trusted these two people absolutely; because they were big business and we assumed they knew what they were talking about."

The Wilpons didn't do wholesale recruiting, however. You had to build up a good relationship with the Wilpons and have the opportunity offered to you. The lawsuit filed by the trustee attempting to reclaim monies lost from investors alleges that "far more outsiders were turned down than actually got into the elite pool of Madoff investors through Sterling."

Despite warnings from many accountants, however, clients jumped at the chance to invest with Madoff -- a problem that plagued nearly everyone associated with Madoff from banks to financial institutions. As long as Madoff was performing, it was OK.

Larry King, the longtime CNN host, was another victim of the Madoff scheme with ties to the Wilpons along with Sandy Koufax, the Dodgers great pictured in the photo (left) with Fred Wilpon. King attended high school with Fred and said he believes the Wilpons were simply offering them a chance to invest with someone who had proven high returns.

"I still love Freddie," King said. "If you look up ‘mensch’ in the dictionary, you will see Freddie’s picture."

-- Evan Brunell

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Category: MLB

Since: May 11, 2007
Posted on: February 22, 2011 10:52 am

Report: Wilpons 'pathway' for Madoff investors

I'm not a huge Wilpon fan--I feel sort of neutral about them, with good points and bad points.  To me they really seem to be owners that love the game of baseball but have made some iffy decisions.  Still though, their decisions as owners and the way they run baseball operations are completely outside the scope of this issue.

It's amazing to me how many people pass judgement on others for not taking money out of a fund that seemed to be doing very well.  Does everyone else do that?  I had a good year with my 401k; it made everything back that it lost over the last few years and then some.  So, should I pull the money out because a company with a solid reputation is doing very well with my money?

The only ones who can cast stones here are those who are 1)  going through every investment they have and tracing it to the very end (including auditing the managers of the funds) and 2) taking money out of anything that's going well because it's too good to be true.  This includes anyone who bought a house between 2002-2006...because obviously you should've known that housing prices were going to plummet. 

Any time you invest with someone who's backed by the SEC, you should be confident that they're doing it right.  That's what the SEC is THERE for.  Madoff is a bad guy--a very, very bad guy who ripped off a lot of people.  However, to crucify someone because they didn't pull out of a fund that appeared to just be very successful is really being hypocritical.

Since: Jul 12, 2009
Posted on: February 22, 2011 10:02 am

Report: Wilpons 'pathway' for Madoff investors

All I had to do was read the first paragraph and found out it was a piece written by the NYT and it is probably a garbage article.  What people need to realize and I'm sure some of you do is that nobody else knew about Madoff's ponzi scheme except himself.  No one else is ever going to get in trouble for it... period.  It is a fact that some big firms wouldn't work with Madoff because they thought it was sketchy.  But that doens't mean that they knew about his ponzi scheme.  For all they knew everything was just fine.  All of these articles about the Wilpon's and Madoff are pretty much a waste of my time, and I don't even know why I keep on reading them.  Nothing is going to happen, the trustee is just a greedy bia.

Since: Aug 18, 2006
Posted on: February 22, 2011 9:31 am

Report: Wilpons 'pathway' for Madoff investors

LUMPOCO has a point and this article also states that the investors were warned of the risks. Investors are constsantly warned of the risks and they chose to take that chance with someone they knew beforehand was fishy.

Since: Aug 18, 2006
Posted on: February 22, 2011 9:29 am

Report: Wilpons 'pathway' for Madoff investors

Sure it seems fishy, but these details still do not prove anything and for the most part is just heresay.

Since: Apr 22, 2009
Posted on: February 22, 2011 7:47 am

Report: Wilpons 'pathway' for Madoff investors

This whole thing is getting rediculous.  I can't believe that most people think the Wilpons should just hand over hundreds of millions of dollars to this trustee.  They still had $500 million with Madoff when the Ponzi scheme came out.  If you want to blame someone for this, blame the SEC.  A government organization that creates a false sense of security for everyone.  They were notified numerous times about this Ponzi scheme and they found nothing.  Sue the SEC and leave the Wilpons alone. 

Since: Nov 5, 2009
Posted on: February 21, 2011 9:49 pm

Report: Wilpons 'pathway' for Madoff investors

Hey Mets fans. We could make an impending sale quicker if we as fans stop buying tickets to the games. We are not doing ourselves any favors by helping fund the Wilpons towards their defense. If you want them out STOP PUTTING $$$ INTO THEIR POCKETS OR TOWARDS THEIR LAWYERS.

Since: Dec 27, 2007
Posted on: February 21, 2011 9:10 pm

Report: Wilpons 'pathway' for Madoff investors

When all is said and done the Wilpon's will be exposed for the frauds they are. Hopefully, that means they will be forced to sell the Mets due to financial contraints or simply because MLB will actually be forced to act. Selig's absence once-again shows not only his indifference, but his utter incompetence and bias. Selig's friendship with the Wilpon's jeopardizes his ability to inact punishment and is a flat-out conflict of interest. The Wilpon's should be under MLB investigation now. Where's the media on this issue?

Since: Nov 27, 2008
Posted on: February 21, 2011 8:36 pm

Report: Wilpons 'pathway' for Madoff investors

This whole thing just isnt right...... Why pay back people who lost money in the Madoff scheme...... they are just as guilty as the one's who made money.... they knew something was wrong.... the return was too high.... they were warned.... they didnt care then as long as they got there's....they rolled the dice and they lost... dont make the winners pay now.... could have gone either way... the losers shouldnt get a free ride.... they were being crooks too...... they just got caught when Madoff did.

Since: Nov 13, 2009
Posted on: February 21, 2011 7:25 pm

Report: Wilpons 'pathway' for Madoff investors

Okay.  I think everyone now knows how corrupt the Wilpons are.  I've been a Mets fan for over 20 years and this is one of the most embarrasing stories that have come out of this franchise.  Bad enough the Mets will have limited success this coming season.  Now, the baseball world recognizes the Mets as that team who owners were involved in a major money scandal.  The Wilpons have been caught in public view and are trying to sugarcoat everything by saying that they will repay the financial losses which seems nearly impossible. 

The only positive thing that can come out of this fiasco for true Mets fans is if the Wilpons sell the ballclub and just leave baseball for good.  The Wilpons are nothing but a bunch of greedy evil individuals.  Money is surely the root of all evil.     

Since: Mar 25, 2009
Posted on: February 21, 2011 7:02 pm

Report: Wilpons 'pathway' for Madoff investors

How much did Mubarak and Khaddafy make off Bernie?
Larry King and Joan Rivers were made for each other.

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