The parties in a $303 million claim against the owners of the New York Mets are waiting for several issues to be resolved, including whether Hall of Fame pitcher Sandy Koufax may testify, before settling on a final lineup of witnesses for a trial set to start today.
Fred Wilpon and Saul Katz, the owners, and Irving Picard, the court-appointed trustee liquidating the former firm of con man Bernard Madoff, will select nine jurors to decide whether the owners and a group of related people, family trusts and other entities can keep the principal they withdrew from their Madoff accounts before the fraud was exposed in December 2008.
U.S. District Judge Jed Rakoff is set to rule on a flurry of pretrial motions filed by both sides last week, including whether witnesses including Koufax and former Manhattan District Attorney Robert Morgenthau may testify, whether Picard may refer to the funds as “other people’s money,” and whether Wilpon and Katz can argue that the U.S. Securities and Exchange Commission did nothing to expose Madoff.
Rakoff ruled March 5 that the Mets defendants must return to Picard as much as $83 million in fictitious profits from Madoff’s Ponzi scheme. The exact amount is subject to dispute, Rakoff said. He hasn’t said when he will rule on the issue.
Rakoff also ruled that Wilpon and Katz must prove they withdrew the $303 million in good faith and didn’t willfully blind themselves to evidence of Madoff’s fraud.
Wilpon and Katz claim the testimony of Koufax and Morgenthau will help jurors decide they were unaware of the Ponzi scheme. Picard urged Rakoff to bar the testimony of those witnesses, claiming they would unfairly prejudice the jury.
Picard also asked Rakoff to rule that the owners can’t tell jurors about the $273 million that he and his law firm have charged in fees for liquidating the Madoff firm. In addition, he wants Rakoff to prevent Wilpon and Katz from creating a “sideshow” over the SEC’s failure to discover Madoff’s fraud.
The owners want to bar Picard from introducing documents from the Sterling Stamos hedge fund. Picard claims Peter Stamos, who ran the fund, frequently warned that Madoff’s returns were “too good to be true.”
Madoff, 73, pleaded guilty in 2009 to orchestrating what prosecutors called the biggest Ponzi scheme in history, and is serving a 150-year sentence in a federal prison in North Carolina.
The case is Picard v. Katz, 11-cv-03605, U.S. District Court, Southern District of New York (Manhattan).