Originally posted on SPORTS by BROOKS  |  Last updated 3/7/12

Monday a federal court judge in New York ruled that Sterling Partners, the company that owns and operates the New York Mets and SNY under the direct auspicies of the Fred Wilpon and Saul Katz families, must pay $83 million to the Ponzi victims of Bernie Madoff. The judge also reaffirmed a March 19, 2012 trial date to determine if the Wilpon and Katz families - and the Mets - owe the victims of Madoff another $303 million.

At trial the trustee of the Madoff victims Irving Picard will be armed with Sterling company documents that include innumerable financial statements and internal communications that show how Madoff’s fictitious investment returns - and the borrowing leverage from its relationship to Madoff - was integral to a business fronted by the brand and financial equity of the Mets.

For example, the 2001 financial statements from companies run by Wilpon and Katz reveal that they budgeted a 14% rate of future return from their current Madoff invesments - which would earn an income of $34 million the following year. At the time that projected income by Wilpon and Katz - from their own company documents in 2001 - accounted for 59% of Sterling’s entire projected total operating cash flow for the year for all their businesses, and 88% of all income generated from liquid assets.

In addition to direct income from “profits” provided by the victims of Madoff’s crimes, at the time of the Madoff bust in 2008 the companies run by Wilpon and Katz had accumulated $237 million from loans backed by, again, the stolen liquidity of Bernie Madoff.

Madoff was so critical to the cash flow and leveraging of the Mets and other Sterling companies that the operator of the largest Ponzi in history had his own permanent line item, “Madoff”, to be discussed at twice-weekly meetings between Wilpon, Katz and other company officials at Sterling.

Wilpon and Katz were so close to the biggest Ponzi schemer in history that Madoff went so far to classify all Sterling accounts with a special “KW” prefix signifying “Katz” and “Wilpon”.  At the time of Madoff’s arrest, Sterling had opened 483 accounts with Madoff for the family, friends and businesses run by Wilpon and Katz - including all of the entities involved with the operation of Mets.

The Wilpon and Katz families were so invested in the financial fortunes of companies funded and leveraged by Madoff that one Bank of America executive called their business operation - according to federal court documents - “a family wealth office.“

And while the Wilpon and Katz families have completely denied any knowledge of the Madoff Ponzi, their behavior suggests otherwise.

(Mets couldn’t keep Ruth Madoff’s $54M “investment” in club secret either)

In one such case, Sterling Executive Vice President David Katz, son of family patriarch and Wilpon partner Saul Katz, said in a sworn deposition in 2010 that employees of the company run by Wilpon and his father “weren’t supposed to tell anyone you were invested (with Madoff.)“

Katz added that because had so many accounts with Madoff, eventually close to 500, “it was silly” for the companies run by Wilpon and his father “to try” to keep their deep financial ties with Madoff a secret.

Beginning March 19 in New York, expect many more of Wilpon and Katz’s family secrets about Bernie Madoff to be rendered former in federal court.

Follow Brooks on Twitter or join him on Facebook for real-time updates.

Share This

MORE FROM YARDBARKER:
Five most anticipated September MLB call-ups
GET THE YARDBARKER APP:
Ios_download En_app_rgb_wo_45
MORE FROM YARDBARKER

U.S. Soccer hands Solo six month suspension for Olympic comments

Report: Josh Gordon will be restricted free agent after 2016

Chargers release statement on Joey Bosa situation

Yoenis Cespedes says he will not opt out of Mets contract

Zach Johnson unloads on Olympic golf

LIKE WHAT YOU SEE?
GET THE DAILY NEWSLETTER:

Drew Brees says players do not trust league office, Goodell

Lawsuit over Hall of Fame Game refiled after McAfee comments

Report: Griffin plans to re-sign with Clippers, won't be traded

Report: Wentz unlikely to see any playing time this season

Minnesota Wild names Prince’s ‘Let’s Go Crazy’ official goal song

Gabby Douglas joining judges for Miss America pageant

One Gotta Go: NFL legends bring the hate for our favorite football movies

Hard not to be cynical about LeBron's 'Cleveland Hustles'

Familiar faces that won't be seen in the NFL this year

24 quintessential moments of Kobe Bryant's career

Revisiting the 10 biggest mistakes of the NFL offseason

One Gotta Go: NFL legends (and Jose Canseco!) have no love for Captain America

Four WNBA teams to pay attention to post-Olympic break

Madden 17 shows how vital a fresh coat of paint can be

Why people just can't get behind the Washington Nationals

Washington's Josh Norman speaks candidly about multiple NFL talking points

Derrick Rose: Knicks have chance to win every game

Ranking the MLB divisional races

MLB News
Delivered to your inbox
You'll also receive Yardbarker's daily Top 10, featuring the best sports stories from around the web. Customize your newsletter to get articles on your favorite sports and teams. And the best part? It's free!

By clicking "Sign Me Up", you have read and agreed to the Fox Sports Digital Privacy Policy and Terms of Use. You can opt out at any time. For more information, please see our Privacy Policy.
the YARDBARKER app
Get it now!
Ios_download En_app_rgb_wo_45

One Gotta Go: NFL legends bring the hate for our favorite football movies

Hard not to be cynical about LeBron James' 'Cleveland Hustles'

Ranking the uniforms of the NFL from worst to best

Familiar faces that won't be seen in the NFL this year

24 quintessential moments of Kobe Bryant's career

One Gotta Go: NFL legends (and Jose Canseco!) have no love for Captain America

Four WNBA teams to pay attention to post-Olympic break

Madden 17 shows how vital a fresh coat of paint can be

Why people just can't get behind the Washington Nationals

QUIZ: Name every player to win a championship with Kobe Bryant

Today's Best Stuff
For Publishers
Company Info
Help
Follow Yardbarker