One of the more peculiar elements to the New York attorney general’s detailing of the charges being levelled against Bernie Madoff – as if 150 years wasn’t enough – is this:
Yes - a restitution claim for $170bn.
Which is rather in excess of the $60bn or so hitherto referenced in relation to the Madoff Ponzi. Perhaps a clue as to the genesis of the newly inflated amount though, comes in a response letter to the above charges from Madoff’s lawyer sent to Judge Chin:
We respectfully suggest that the amount of the government’s forfeiture demand is grossly overstated – and misleading – even for a case of this magnitude.
…in a case like this… the proceeds subject to forfeiture are limited to Mr. Madoff’s net profits and should not include his gross receipts.
In other words, the $177bn figure sounds like a total for the amount of money circulated though the Madoff Ponzi – a lot of which, as Mr Madoff’s lawyer goes on to state may have well been “paid from the aforementioned account to investors in the form of redemptions, a number likely in the billions.”
If the government really thought this was in fact, a $177bn fraud, it would have alleged it as such in the three counts of money laundering charged in the Information.
Touché.
Related link:
Madoff lawyer absorbs part of the rage – DealBook