Irving Picard, the trustee in charge of allocating the ill-gotten funds from Bernie Madoff’s $65 billion Ponzi scheme, is suing the “victims” who managed to profit on the fraud by withdrawing their money in the early going.
Lawmakers are rallying to the side of the thousand-odd “net winners” in the scheme. Republican Rep. Peter King said at a House Financial Services Committee hearing, “They should be treated as victims, not as criminals.”
Democratic Rep. Gary Ackerman offers some rationale for the decision not to go after the net winners: “If you took some of [your money] out and spent some of it and somebody now comes along and tells you that it wasn’t yours, that it was stolen … it’s already gone.”
The Securities Investor Protection Corp., which has given Picard authority to determine payouts to Madoff victims, is authorized to provide up to $500,000 to any individual investor. Many of Madoff’s marks got taken for a much more expensive ride.
It’s an awkward situation.
Picard’s law firm makes around $283,000 a day for its stewardship of the fraudulent funds, so at least there’s a happy ending in this for someone.