http://www.nytimes.com/2011/02/05/sports/baseball/05mets.htmlThe lawsuit, unsealed in federal bankruptcy court in Manhattan on Friday morning, contends that the team’s owners, Fred Wilpon and Saul Katz, used the profits from their investments in Madoff to establish personal fortunes, create dozens of family trusts and financially fuel their array of businesses, from the Mets to real estate to the creation of a cable sports network.
At various times over the years, as their investments only widened and deepened, they were blind to what the lawsuit calls a litany of alarms sounded by those close to them, by fellow investors and by financial institutions.
Among the warnings, which the lawsuit says the two owners “consciously disregarded,” are these:
¶The chief investment officer at Sterling Stamos, a hedge fund independent of Madoff in which Wilpon and Katz invested, said he repeatedly warned the men and their families that Madoff’s returns were “too good to be true.” However, the suit says, the warnings were ignored. Other personnel at the Stamos fund expressed similar concerns about Madoff.
¶Merrill Lynch, the investment bank that acquired 50 percent of Sterling Stamos in 2007, had a prohibition on investing with Madoff and told Katz that Madoff’s operations would not pass its standards.
¶Ivy Asset Management, which was approached in 2002 to back Sterling Stamos, told Katz and two of his partners of its suspicions about Madoff’s investment business.
¶A consultant to Sterling Stamos told Katz in 2003, “He couldn’t make Bernie’s math work.”
But throughout, according to the trustee, Irving H. Picard, Wilpon and Katz kept investing with Madoff, in what the lawsuit calls a “cycle of dependency.”
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