On Thursday, the Court of Appeals decided that investors who took advantage of Bernard Madoff’s mega Ponzi scheme even though they knew nothing about it should pay off their dividends.
The US 2nd Circuit Court of Appeals in Manhattan upheld lower court decisions in cases brought by Irving Pickard, a court-appointed trustee who has recovered funds for deceived investors for more than a decade.
Madoff, 82, is serving a 150-year prison sentence after pleading guilty to federal charges in 2009.
His attempt to release him early was rejected on the grounds that he was dying this year. Thousands of investors have lost billions of dollars through scams for several decades.
Madoff’s clients who took in millions of dollars more than their original investment fought in court to hold onto their profits, and argued through their attorneys that they had received the payments in good faith and that too much time had passed to allow Picard to recover the money.
However, a panel of three judges from the Second Circuit concluded that investors were not entitled to “fake” profits that were in fact money belonging to other clients.
He indicated that investors were allowed to keep the original investments.
Picard reported more than $ 14.3 billion of refunds for investors who have lost more than $ 17.5 billion in their investment. The collapse of the Ponzi scheme caused many investors financially because they were told that their investment had grown much larger than they had started with.