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To: Liz; colorado tanker; Qbert
The perp ran a hedge fund but was convicted of criminal fraud for running a ponzi scheme and sent to prison. The bankruptcy trustee is trying to get the money back that the perp lost on the theory that it was investor money improperly transferred.

The suit is based on the fraudulent conveyance provisions of the Bankruptcy Code and California statutes, which can be pretty technical.

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The court-appointed trustee tracing Madoff's assets found a super-secret labyrinth of interrelated international funds, institutions and financial entities of almost unparalleled complexity and breadth...

Yes, this is purely a civil "clawback" recovery claim, without any IRS tax claims or allegations of illegal means involved on the part of the eventual / final recipients of ill-gotten gains by Ruderman. If IRS and/or FBI are interested in the case they will have to have separate investigations and/or cases - the "clawback" doesn't rely or concern itself with the legality or illegality of the chain or final acquisition of the original "fruit of illegal gain".

In the past, several highly public cases of expensive artworks acquired by well-known people (reportedly, Bill Gates, Tom Hanks, etc. Art, Restored - Forbes, by David Armstrong, 2007 December 27) turned out to have been stolen and sold, so they were returned to their legitimate owners without recompense to end-buyers, but without any allegation of fraud, conspiracy or intent to defraud by the end-buyers of stolen art.

That's the biggest problem with Madoff's case trustee Irving Picard trying to "prove" and extract money from the banks and some other defendants (like the Mets owners) by suing them on the basis that they "had to know that Madoff was running illegal scheme" - that basis maybe the case for FBI (if he wants to share his "proof" of that) but it's irrelevant for the "clawback" statute so he still would not get any money for his "clawback" class on this basis and the [potential] lawsuit of wrongdoing would not belong in the bankruptcy court.

Picard at this point is really a glorified accountant, being handsomely paid (at a rate of $697.50 per hour, or at a "discounted" rate of $510 per hour when "outsourced" to Alan Nisslson of Windels Marx Lane & Mittendorf) for playing a Perry Mason and is just trying to make himself look good in the eyes of the class while padding his billable hours with these irrelevant lawsuits and ridiculous public relations media campaign. Trying to "scare" opposing lawyers into settlements by accusing their clients of "knowledge of wrongdoing" and by "flashing" large "punitive" numbers in a lawsuit is not going to fly at that level, it only makes him a self-serving laughingstock who is profiting at the expense of his class.

From Tobey Maguire, Billionaire Alec Gores Being Sued For Poker Winnings From Jailed Ponzi Schemer - Forbes blog, by Chris Barth, 2011 June 22


37 posted on 06/23/2011 1:20:08 PM PDT by CutePuppy (If you don't ask the right questions you may not get the right answers)
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To: CutePuppy

Trustees in these big fraud cases always wear a very public white hat claiming they are coming to the rescue of the investors by suing everyone in sight. Meanwhile, they and their lawyer buddies rake in huge fees.


38 posted on 06/23/2011 1:30:28 PM PDT by colorado tanker
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To: CutePuppy

Thanks for all the great info.


39 posted on 06/23/2011 1:35:14 PM PDT by Liz ( A taxpayer voting for Obama is like a chicken voting for Col Sanders.)
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