Billionaire brothers Charles and David Koch have made plenty of good business decisions over the years, and placing millions of dollars with Ponzi-scheme mastermind Bernard Madoff may have been one of them, the Winnipeg Free Press reported today. Koch Industries Inc. invested an unknown sum with the con man’s now-defunct securities firm years ago and walked away with $21.5 million in profits before Madoff’s arrest in 2008. Since 2012, the company run by the conservative-activist brothers, worth today a combined US$109 billion, has refused legal demands to return the money. Irving Picard, the trustee liquidating Madoff’s firm, contends in a suit that the cash is fraudulent proceeds of the fraud and should be shared among the thousands of victims. Koch Industries, and dozens of other early investors named in 87 other lawsuits, argue that the company can keep the profits because the money was sent overseas and is beyond U.S. jurisdiction. At stake: a total of $2 billion. The battle is coming to a head in Manhattan bankruptcy court, where Judge Stuart Bernstein could rule within weeks on a key issue affecting Picard’s suit. Madoff is currently serving a 150-year sentence in a federal prison in North Carolina for running the Ponzi scheme.
