Suit says Mets owners should have noticed Madoff scheme

Bernard L. Madoff Bernard L. Madoff
By Larry Neumeister
Associated Press / July 31, 2010

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NEW YORK — The owners of the New York Mets should be held accountable for letting their workers put more than $16 million in 401(k) assets into accounts controlled by jailed financier Bernard L. Madoff, a widow said in a lawsuit filed yesterday.

The lawsuit in US District Court in Manhattan was brought against Sterling Equities Associates, which owns the Mets, and also named Fred Wilpon, the Mets chief executive and principle owner.

Sterling Equities and several of its top executives should have known that Madoff was carrying out a massive Ponzi scheme that cost thousands of investors billions of dollars, the lawsuit said. Madoff, 72, revealed the fraud in December 2008, pleaded guilty to fraud charges and is serving a 150-year prison sentence.

A message left with a spokesman for Sterling was not immediately returned. Sterling said in December 2008 that it was shocked by Madoff’s revelations.

The court-appointed trustee who is recovering Madoff money for investors has said the Mets profited by nearly $48 million from their roughly $523 million in investments with Madoff.

The lawsuit, which seeks class-action status, said its plaintiff, Elyse S. Goldweber, was the beneficiary of the 401(k) plan built by her late husband, David A. Sloss.

It said the majority of $280,420 in her husband’s retirement plan was directly invested with Madoff “and has now been wiped out.’’

A statement sent March 31 said that she should not rely on the stated balance in the retirement account “in light of the reported theft by Madoff,’’ the lawsuit said. The actual account balance cannot be determined, the lawsuit quoted the statement as saying. The retirement fund had $16.2 million of its $17.6 million in assets, or 92 percent, invested with Madoff, the lawsuit said. It did not say how many employees or former employees were affected.

The lawsuit particularly took aim at statements by Wilpon that he and his business were not seriously harmed by the Madoff scandal.

“While defendant Wilpon has been quoted as claiming that he and his business family are “fine,’’ his loyal employees [many of whom had previously been laid off] have lost their retirement savings,’’ the lawsuit said. It added that an insurance policy does not come close to covering the losses.

Investigators who are still trying to identify and collect Madoff assets for investors say the financier lost nearly all of the $20 billion invested with him even though he claimed in statements mailed to 4,800 account holders in 2008 that their investments were worth $68 billion.