Financial Crime World

Title: Irving Picard’s Pursuit in Bermuda: Seeking a Stay of Appeals in the Bernie Madoff Case

Last Updated: March 26, 2024 8:05 AM (GMT)

Bernie Madoff’s Ponzi Scheme and its Aftermath

  • Bernie Madoff’s Ponzi Scheme: Unfolded in 2008, the largest in history, with an estimated $18 billion stolen from investors
  • Madoff’s Arrest and Death: Arrested in 2008, sentenced to 150 years in prison, and died in 2021 at the age of 82

Legacy in the Courts: Picard vs. Bermudian Entities

  • Filing of Legal Proceedings: Irving Picard, as trustee, filed against 4 Bermudian-based entities in 2012 in the US Bankruptcy Court
  • Amount Claimed: Total claim of $36.5 million in the US bankruptcy case

Shift to Bermuda: Proofs of Debt and Appeals

  • Creditors’ Proofs: Teneo, joint liquidators, called for creditors’ proofs connected to the US bankruptcy case
  • Rejection of Picard’s Proofs: Teneo rejected Picard’s proofs based on US proceedings
  • Appeal of Decision: Picard appealed Teneo’s decision
  • Seeking a Stay: Picard now seeks a stay of those appeals in Bermuda’s Supreme Court pending a final ruling in the US bankruptcy case
  • Court Appearance: Picard’s special counsel, Erik Penz, argued before Chief Justice Larry Mussenden for an order regarding directions leading to the eventual hearing of the stay application
  • Order Granted: Mussenden granted the order, with a highly anticipated hearing set to take place later this year

Bernie Madoff’s Ponzi Scheme: A Classic Scam

  • Running a Ponzi Scheme: Madoff paid returns to old investors using cash from new investors
  • Collapse: The scheme collapsed during the 2008 financial crisis when investors demanded their investments back
  • Recoveries and Distributions: As of late February 2024, Picard reported $14.66 billion in recoveries and settlements, with $13.9 billion from the Customer Fund