
Money stolen by Bernie Madoff is still being found - ryanlol
https://www.economist.com/news/business-and-finance/21737446-almost-decade-after-ponzi-scheme-collapsed-trustees-are-still-returning
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pcurve
I'm surprised at the recovery rate. $11.5 billion out of $25-$30 billion (But
principle). There's another $5 billion+ sitting around. There was definitely
enough money for this have gone on for decades longer.

Lawyer fees have exceeded $1 billion so far, which I suppose is reasonable
given the money returned.

~~~
danjayh
Read to the end. They're suing people who took their money out, reclaiming it
into the bankruptcy trust, and disbursing it (even though these people didn't
break any laws). The fund didn't actually have all of the money that they're
confiscating for disbursement.

~~~
alexbeloi
If somebody robbed a bank and gave you the money, there would be an
expectation that you would have to return that money, 'possession of stolen
property' and all that. The fact that the money was given in the form of
investment returns doesn't change that.

I think we can all agree that each investor should get their principal
investment back. I don't think there's a good argument for letting people keep
the _impossibly high_ returns on that principal.

~~~
cm2187
And if you sold a car to that bank robber without knowing it was a robber you
would have to reverse the transaction?

~~~
x0x0
First, Picard (the trustee) can only clawback transactions for six years per
NY law. Second, from
[https://en.wikipedia.org/wiki/Recovery_of_funds_from_the_Mad...](https://en.wikipedia.org/wiki/Recovery_of_funds_from_the_Madoff_investment_scandal)
he seems to have primarily gone after people who knew, or should have known,
that Madoff was doing something fraudulent. eg, from the article,

> _On May 7, 2009, Madoff Bankruptcy Trustee, Irving Picard filed a lawsuit
> [38] against J. Ezra Merkin, seeking to recover almost $500 million
> withdrawn from Madoff accounts in the last six years. The complaint alleges
> that since 1995, Merkin steered more than $1 billion to Madoff through three
> private hedge funds, Ascot Partners, Ariel Fund, and Gabriel Capital. Since
> 2002, the funds withdrew at least $494 million from Madoff — returns that
> Merkin “knew or should have known” were fraudulent. There were at least 500
> instances in the last ten years when his Madoff account statements showed
> large blocks of stock bought or sold at prices that did not match the
> stock’s trading range for the day when the transactions supposedly
> occurred._

~~~
charlesdm
Or he didn't look closely enough into what was happening. He might not have
been very capable, just lucky. "Should have known" is not an answer to
(potential) incompetence or stupidity.

Given his funds went bankrupt, he probably did not know.

~~~
x0x0
The law seems to take a dim view of sophisticated investors who pretty clearly
could have trivially found something fishy and instead chose not to look.
Deliberate ignorance apparently gets clawbacks.

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debt
I mean if you haven't seen it yet, Wizard of Lies on HBO is a Soprano's-level
of quality depiction of the whole Madoff thing.

~~~
saym
In addition to film, I highly recommend the book published by the
whistleblower Harry Markopolos, "No One Would Listen".[0]

He spent the better part of a decade trying to alert the SEC to what he found.
It was certainly a risky endeavour given how much money was at stake.

[0]
[https://duckduckgo.com/?q=harry+markopolos+no+one+would+list...](https://duckduckgo.com/?q=harry+markopolos+no+one+would+listen&ia=products)

------
cyphunk
Irony of a dead system.

MADOFF: Rich man looses money of old timey rich people, government scrambles
to find and repair.

MTGOX: e-BTC collude with hackers to hack MTGOX, FBI takes down e-BTC, FBI
keeps money.

~~~
celticninja
It was BTC-E and you are missing some important information. Btc-e collusion
not yet proved, FBI still keep the money, BTC-E remain in business and arrange
to refund users at their own expense. So the analogy would require the
government to take Madoffs money while claiming he was defrauding users and
Madoff continuing his scheme and returning to them the money the government
had taken from him/them.

~~~
cyphunk
You are right, my comparison is absurd. bTCe work to return funds to their
customers though, not those of mtgox. Nor should they need to, if indeed the
accusation they colluded with MTGox hackers is false

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cm2187
Are the paying people for lost returns? One one side these returns were
fictitious, but on the other if you invested $100 in the 70s, should your
claim in 2018 be only $100?

~~~
slededit
People will be lucky to get cents on the dollar. Lost returns isn't even in
the ballpark.

~~~
cm2187
There still needs to be a way to allocate the recoveries. If investor A
invested $100 in 1970 and investor B invested $100 in 2006 do they both get
the same recovery?

~~~
x0x0
Unfortunately, they do. The conclusion was that, because for quite a period
there were no investments, just a scam, that the law says money-in, money-out.

In particular:

> _The accounting of "funds stolen" in this matter excludes inflation,
> interest, time invested, opportunity cost, and falsely reported balances.
> The interpretation of the laws do not consider time value of money when
> reimbursing lost funds._

see
[https://en.wikipedia.org/wiki/Recovery_of_funds_from_the_Mad...](https://en.wikipedia.org/wiki/Recovery_of_funds_from_the_Madoff_investment_scandal)

~~~
sjwright
The key quote from that article:

> _"...no legitimate investments were made on the investors' behalf for at
> least the last 12 years..."_

It's unfortunate for the people who _thought_ they were earning interest, but
it wasn't earned; it was money stolen from other investors.

~~~
x0x0
It is worth noting, however, that apparently you can only clawback
disbursements for the previous six years, so someone who invested in the 70s
most likely did quite well via withdrawals.

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sitepodmatt
Paywall. Non paywall link?

~~~
ironjunkie
open in incognito mode

