Madoff Trustee Demands Investors Return $735 Million
By Christopher Scinta, Linda Sandler and David Voreacos, Bloomberg.com (4/23/09)
The trustee liquidating Bernard Madoff’s defunct money management firm told 223 investors to return as much as $735 million or face legal action, said a person familiar with the matter.
“The trustee demands that you immediately return such amounts to the trustee for the benefit of all defrauded creditors” of Bernard L. Madoff Investment Securities LLC, according to a copy of the letter obtained by Bloomberg News.
Trustee Irving Picard mailed the so-called clawback letters to customers who redeemed investments over the past six years, the maximum period for which he can seek recovery under New York law, according to the person. Picard contacted mostly individuals, not so-called feeder funds, the person said. The 223 letters constitute the bulk of expected clawback letters, according to the person.
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IRS giving relief to some Madoff investors
From the Los Angeles Times (3/18/09)
By Martin Zimmerman
The agency issues guidelines that could help many of the 4,800 victims of the $65-billion investment fraud recoup some losses by seeking reimbursement of up to five years of past tax payments.
Victims of New York financier-swindler Bernard Madoff will get tax relief from Uncle Sam, but not as much as some had hoped.
The Internal Revenue Service issued guidelines Tuesday that could help many of the 4,800 victims of Madoff’s $65-billion investment fraud recoup some of their losses by seeking reimbursement of up to five years of past tax payments.
“Beyond the toll in human suffering — as entire life savings and retirements appear to have been wiped out — the Madoff case raises numerous tax and pension implications for the victims,” IRS Commissioner Doug Shulman told the Senate Finance Committee.
Under the guidelines, money that disappeared in Madoff’s Ponzi scheme will be classified as a theft loss, potentially providing victims with a much bigger tax deduction than if it were classified as a regular investment — or capital — loss.
Madoff pleaded guilty Thursday in federal court in Manhattan to 11 securities-related fraud counts. As investors in the courtroom applauded, Madoff was led to jail to await a June 16 sentencing hearing.
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