Wilpon Opened 65 Madoff Accounts With JPMorgan And Bank Of America's Support, According To Lawsuit

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New details emerged regarding Mets owner Fred Wilpon’s finances in the wake of the lawsuit filed against him by the trustee for Madoff victims, via the New York Times:

  • Wilpon was relying on his Madoff investments to pay off nearly $500 million in outstanding debt generated by his real estate firm, Sterling Equities, and the construction of Citi Field. He didn’t want to have to sell assets to pay it off.
  • Eight banks, including JPMorgan Chase and Bank of America, restructured the loans on behalf of Wilpon, thanks to his long “public record as a careful businessman and respected team owner.” According to the lawsuit, banks were so enamoured with the returns Wilpon earned on his Madoff investments, that they continued to bankroll his debt. 
  • The trustee heading the case, Irving Picard, alleges that Wilpon opened 65 accounts to invest with Madoff, and borrowed even more money to invest in those accounts.
  • Picard alleges that rather than go to the banks for more loans when he was cash poor, Wilpon, in some cases, had Madoff lend him millions as an “investment” in Sterling Equities. That allegation further implies the two were working together.
  • While Wilpon may have to turn to banks to help him with money he’ll eventually need to settle the case, they likely won’t force him to sell all his assets in the near future. In these cases banks “are usually cautious,” and wait to see the best course of action.

Interestingly, this Times story indicates that Picard is seeking $1 billion from Wilpon and his partners, as the Post guessed the day before details of the lawsuit were disclosed. But Bloomberg reported the amount to be $295 million.

This $700 million detail, is absolutely crucial to estimating how much of the Mets Wilpon would be forced to sell. He’s currently seeking a partner to purchase a 25 per cent stake in the team, but the closer he is to having to pay Madoff victims $1 billion, the more likely it becomes that he’ll have to sell the entire franchise. The Mets were valued at $858 million by Forbes in 2010.

See Also: Mets Owner Is On The Hook For $295 Million In Madoff Victims’ Suit

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