Friday, April 10, 2009

Madoff investors get sued!

More trouble for Madoff investors, following court orders that an investor, who yanked his $150 million from Madoff's funds, is now being directed by the court to return the money!

Here's the story:

A court-appointed trustee liquidating what's left of Madoff's wrecked brokerage filed a lawsuit yesterday for the return of the cash, which an unidentified investor in the British Virgin Islands withdrew around Oct. 31 -- two months before Madoff admitted his $60 billion swindle.

The suit opens the door for the trustee to claw back untold millions from other investors who had believed they were lucky enough to have escaped the Madoff collapse with good timing or other breaks.

Court papers indicate that seizures also might begin against investors in other offshore havens, including Gibraltar, the Cayman Islands and Luxembourg.

The trustee, Irving Picard, is armed with the broad powers of the US Bankruptcy Court and can cut through many ordinary legal obstacles to the forfeiture of cash if the loot is deemed to have been unlawfully gained or secretly diverted from the books.

Picard said earlier he has located about $1 billion of Madoff's scattered assets in hopes of recovering it for victims.

It wasn't clear in the lawsuit how far back seizures might go. Madoff admitted running his Ponzi scheme for decades.

The lawsuit said some of Madoff's investors received fund distributions that were nothing more than fictitious profits. This money should be returned to help reimburse Madoff's many victims, Picard said in the lawsuit.

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