Former customers of jailed fraudster can't keep money that 'belongs' to other people
Investors who profited from Bernard Madoff's infamous Ponzi scheme even though they knew nothing about it must pay back their profits, an appeals court ruled.
The Associated Press reported that the 2nd U.S. Circuit Court of Appeals in Manhattan upheld lower-court decisions in cases filed by Irving Picard, a court-appointed trustee who has recovered money for cheated investors for over a decade.
Madoff, 82, is serving a 150-year prison sentence imposed after he pleaded guilty to federal charges in 2009. Thousands of investors lost billions of dollars through his multi-decade fraud.
Madoff customers who received millions of dollars more than their original investments had argued through their lawyers that they’d received the payouts in good faith and that too much time had passed to let Picard recover the money.
A three-judge panel of the 2nd Circuit concluded, however, that the investors were not entitled to "fictitious" profits that actually belonged to other customers. The investors can, however, retain the principal of their investments.
Picard has reported recovering more than US$14.3 billion for investors who lost over $17.5 billion US that they invested.