Another 'Clawbacks' Defense for Madoff Clients: No Money
A new defense has been added to the list of reasons why early investors with Bernard Madoff arguably shouldn’t have to pay “clawbacks” of proceeds they received early on during his operation of a $65 billion Ponzi scheme under the guise of a hedge fund.
In short, they don’t have any money. Among those in this predicament is Andrew Ross Samuels, a student at Brooklyn Law School. He made the news last month by winning a freeze on assets held by Madoff’s brother, an attorney who served as trustee of a trust fund for Samuels and invested the money, which Samuels received from his grandfather, with Madoff.
A New York attorney representing Samuels, 22, says his client is now among more than 200 people from whom court-appointed trustee Irving Picard is seeking so-called clawbacks of claimed investment proceeds they received early on in the Bernard Madoff scam, reports the New York Law Journal in an article reprinted by New York Lawyer (reg. req.).
But Samuels never received any funds from Bernard Madoff, says attorney Steven Schlesinger. He thinks a $62,000 estate tax payment made by the trust fund to the Internal Revenue Service may have put Samuels on Picard’s clawbacks list.
Related coverage:
New York Daily News: “Feds aim to retrieve profits from those who cashed out on Madoff deals”
Reuters: “Madoff trustee seeks $150 mln investor “clawback”“
Wall Street Journal (sub. req.): “Madoff Trustee Sues Investors to Recover Funds “
Wall Street Journal (sub. req.): “Madoff’s Net Losers Safe From Clawbacks”
