It’s the possibility that Wilpon knew or should have known that Madoff was running a Ponzi scheme that has prompted the trustee to seek more money from the Wilpon entities than they gained from their investments.
If Wilpon knew something wasn’t right about the Madoff operation and failed to alert authorities, he could be held liable for losses suffered by other investors Madoff swindled.
“That’s a devastating allegation,” the lawyer said. Noting that the trustee’s lawsuit was filed under seal at the request of Wilpon’s lawyers, he added, “The seal is another reason why Wilpon has to settle. The reason we want to see what is sealed is the same reason Wilpon wanted it sealed. There must be serious allegations that Wilpon did some bad things.”
The most creative aspect of Chass’ piece is the solution he proposes (not that I think it’s possible or even likely):
There are plenty of wealthy people, in New York alone and especially Mets fans, who could make that kind of investment, but [Irving] Picard [the trustee for the victims of Madoff’s massive Ponzi scheme] is closest to the situation and should get the first shot at becoming Wilpon’s partner, particularly because part of the money he would be investing would be coming from Wilpon himself.
Why Picard, you ask?
Picard isn’t doing this work for the good of humanity. His deal with the government, according to a lawyer familiar with it, is that he receives 1.5 percent of the money he recovers beyond $1 billion. He reportedly has already recovered $10 billion, which means he has earned $135 million for himself on his way to an estimated several hundred million dollars.