On Monday, the United States Supreme Court declined to listen to an offer from major banks and companies, including Koch Industries, to prevent a trustee from pursuing money for victims of jailed Ponzi scheme swindler Bernard Madoff to recover funds that they were transferred abroad.
The judges left in place a lower court ruling that revived dozens of lawsuits filed by Irving Picard, the trustee who liquidates Madoff’s firm, with the aim of recovering foreign transfers. The defendants in the litigation had said the ruling improperly extended the scope of the US bankruptcy law beyond the country’s borders.
The US Court of Appeals for the 2nd Circuit. The Manhattan-based US reversed a bankruptcy judge’s decision to dismiss the lawsuits. President Donald Trump’s administration agreed with the second circuit ruling.
The dispute is part of Picard’s 11-year search for tainted money stemming from history’s largest Ponzi scheme, which Madoff orchestrated through his New York firm, Bernard L. Madoff Investment Securities LLC. The administrator estimated that Madoff’s clients lost $ 17.5 billion in the fraud.
Madoff, 82, was arrested in 2008 and pleaded guilty in 2009. He is serving a 150-year sentence in North Carolina. Madoff, whose lawyer has said he is dying of kidney failure, has sought a “compassionate release,” saying he was less than 18 months old.
The case centers on 88 lawsuits filed against Koch, controlled by billionaire Charles Koch, HSBC Holdings Plc, UBS, and other entities accused of receiving Madoff-linked money indirectly through feeder funds abroad that they had invested directly with Madoff.
Picard contends that about $ 3 billion was fraudulently transferred outside of the US. USA, Considering its agreement with the British Virgin Islands-based Kingate Power Funds.
The trustee sued Koch, a Kansas-based private industrial conglomerate, in 2012 to recover $ 21.5 million. Madoff was accused of sending to another feeding fund based in the British Virgin Islands and then to a Koch entity in Britain. Koch was not charged with wrongdoing.