New Court Filing Says Picard Lawsuit Built On Shaky Evidence

An article by posted on February 18, 2012

Irving Picard: Can he prove Wilpon was a willing participant in Ponzi scheme?

Michael O’Keefe of the Daily News reported about some new documents filed by the Mets in Manhattan federal court on Thursday as they continue to push for a summary judgement to dismiss the suit by trustee Irving Picard, before it goes to trial on March 19.

Mets lawyers are arguing that Picard has failed to prove that the Mets’ owners suspected Madoff was running a Ponzi scheme and took deliberate action to avoid confirming the fraud. The papers outlined several inaccuracies and inconsistencies with what Picard alleges in his complaint.

Picard mischaracterized testimony from Peter Stamos, a partner in a hedge fund created by Wilpon and Katz, when he claimed Stamos had warned them about Madoff.

“The trustee has now deposed Mr. Stamos twice,” Thursday’s filing said. “Both times, under oath, Mr. Stamos stated categorically, emphatically, and unflinchingly that, up until the day Madoff’s fraud was disclosed, he believed Madoff to be a most honest and honorable man and an exceptional money manager, and that he never warned any Sterling Partner that Madoff’s lack of transparency, or anything else, was a ‘red flag’ for fraud.”

Thursday’s filing also says the Mets owners’ did not shop for Ponzi scheme insurance, as Picard has claimed, and also disputes Picard’s argument that Noreen Harrington, “a hedge-fund executive who had been a whistle-blower in other cases”, had expressed concerns about Madoff’s returns.

“She was aware that her accusations were utterly contrary to the facts known to Mr. Katz for many years, and, when probed by Mr. Katz about her Madoff accusations, she offered no facts to support her opinion and told him she could be wrong.”

“The trustee offers no evidence to dispute the record presented by defendants, which demonstrates that, for good reason, defendants trusted Bernard L. Madoff until the day his fraud was disclosed and never for a moment thought that he or his brokerage was engaged in a Ponzi scheme or fraud.” Mets attorneys conclude.

Remember what I’ve been telling you…

They have to prove that Wilpon knew of the fraud AND deliberately ignored warnings.

Say it out loud a few times so you could realize how impossible that will be to prove without a shred of indisputable evidence or a smoking gun.

Meanwhile, Picard also filed papers on Thursday reiterating his request for Judge Rakoff to award him $83 million in fictitious profits before the case goes to trial. I could see the Judge granting Picard’s request because I’ve always believed and said that the $83 million was all the Wilpons should be held liable for and not a penny more.

But here’s the ironic part to all of this which many seem to ignore and has been very under-reported in my opinion.

There’s the separate filing by Mets owners who are seeking to recover $160 million in “net-loser” claims. A lawyer who has been following these proceedings told me that the “Mets have as much of or even better chance” of being awarded said amount, than Picard has of being awarded anything above the $83 million.

So what does this all mean?

Simply put, Mets owners Fred Wilpon and Saul Katz could actually come out ahead when the dust settles and net $77 million in gains, NOT losses.

But shhh… Keep that under your hat… Nobody wants word about this leaking out to the masses…

About the Author ()

I'm a lifelong Mets fan who loves writing and talking about the Amazins' 24/7. From the Miracle in 1969 to the magic of 1986, and even the near misses in '73 and '00, I've experienced it all - the highs and the lows. I started Mets Merized Online in 2005 to feed my addiction and interact with other passionate Met fans like you. Follow me on Twitter @metsmerized.

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