The U.S. Supreme Court asked for the Trump administration’s views on a $3 billion appeal from foreign financial institutions that took stolen money from Bernard Madoff’s Ponzi scheme, WSJ Pro Bankruptcy reported. The justices yesterday asked the U.S. solicitor general to weigh in on whether the trustee cleaning up after Madoff’s Ponzi scheme can pursue tainted cash that was sent to offshore investment funds, then passed on to European banks and other foreign recipients. Irving Picard, the trustee cleaning up after the Ponzi scheme, has long maintained that under U.S. bankruptcy law, he can recoup stolen money that passed between foreign institutions before the $20 billion fraud was discovered. Banks including HSBC Holdings PLC and several Caribbean governments have fought Picard’s efforts, saying that transfers occurring entirely outside U.S. borders are beyond his grasp. Picard has recouped more than $13 billion in Ponzi scheme proceeds over the past decade, arguing that money withdrawn from Madoff’s phantom investment firm should help repay average investors who came out as net losers when the fraud collapsed in 2009. Madoff pleaded guilty to running the largest Ponzi scheme in history and is serving a 150-year prison sentence in North Carolina. Read more.
For a further analysis of commercial fraud, make sure to pick up a copy of ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case.
