Money Shot Of MLB ‘Pon Stars’ Completely Spent

Any chance of Fred Wilpon maintaining ownership of the Mets likely ended this week thanks to a U.S district court judge named Jed Rakoff.

New York Mets ticket sales won't save MLB's 'Pon Star' Owner

(Opening Day: Mets Fans No Longer Pay To Watch “Pon Stars”)

On the eve of a federal court proceeding to determine if the Mets owe up to $383 million to the victims of the $50 billion Bernie Madoff Ponzi, and with Wilpon and the Mets already facing long odds in their attempt to “restructure” hundreds of millions in debt directly attributed to their intimate and unorthodox financial arrangement with Madoff, Wednesday Rakoff issued the following requirements of the MLB team’s counsel in its bid to stave off additional creditors:

A central issue in the forthcoming trial is whether the transfers that Madoff Securities made to the defendants during the two years preceding Madoff Securities’ filing for bankruptcy –up to an amount equal to their investment with Madoff Securities during the same period -were received by the defendants in good faith, i.e., without their having willfully blinded themselves to Madoff’s scheme.

At the in-court conference on March 9, 2012, the parties raised the question of whether, on the facts of this case, this issue should be viewed as an issue under 11 U.S.C. § 548(a) (1) (A), in which case the burden of proving willful blindness would be on the plaintiff, or as an issue under 11 U.S.C. § 548(c), in which case the burden of proving the absence of willful blindness would be on the defendants.

Having considered the parties’ submissions, the Court adheres to its prior determination that this is an issue under § 548(c), and that therefore the burden of proving, by a preponderance of the evidence, that the defendants received the aforementioned transfers in good faith (i.e.,in the absence of willful blindness) rests on the defendants.

Ingested without an Everest-like level of evidence against Wilpon and the Mets in relation to the nature of their “faith” in the legitimacy of their Madoff investments, Rakoff’s order may seem somewhat innocuous.

But as such evidence exists, including the documentation of a phony $54 million “investment” by Ruth Madoff (on Mets letterheard!) and the son of Mets co-Owner Saul Katz stating under oath that the team initially tried to keep their “investments” with Madoff a secret, even if Wilpon & Co. win a satisfactory judgement the necessary court defense required to provide such an outcome completely defeats their subsequent reasoning for being allowed to keep the team.

Thus far the defense proffered by Wilpon - who is unquestionably the front man of the Mets - is that the unflinching, decades-long level of trust he placed with Madoff in “investing” billions in assets was solely based on the Ponzi schemer being his “family friend.”

(Mets Letterhead: Phony “Investment” Helped Save SNY Deal For Team)

But in the same breath Wilpon has also stated as part of that defense that he wasn’t that close to Madoff.

Excerpt from Wilpon discussing his relationship to Madoff during a sworn July 10, 2010, deposition in New York:

I had a personal relationship with the Madoffs that developed over time, and not an everyday personal relationship, but a friendship.

And so I made it a policy that when I saw him at a charitable event or celebration of some kind, you know, we attended his kids’ weddings, he attended our kids’, you know, we were family friends, I just didn’t discuss business with him.

So my conversations with Bernie Madoff were really of a, just of a personal nature.

Of what was happening in their lives and what was happening in our lives.

Not in a context of, you know, what’s happening in the business, how are you investing these funds?

Because, frankly, I wouldn’t — that’s not my expertise. I wouldn’t really know, and I didn’t want to mix the two.

So, once a year we’d go and have a conversation, mostly schmoozing. You know what schmoozing is.

That’s the kind of relationship it was. Very trusting relationship.

There’s no person that you will talk to, none, that is more betrayed than I am.

So Wilpon didn’t have an “everyday personal relationship” with the man the Mets tied up most of their money with while also vigorously transacting that cash to purposefully extract as much of Madoff’s phony “interest” as possible.

Bernie Madoff Investments Were Fred Wilpon and Saul Katz Family Secret

Yet Wilpon also claims he nor anyone with the Mets ever investigated Madoff’s “investment” firm to see if transacting billions with Madoff was a safe, prudent investment for the Mets - because they trusted him so much!

If Wilpon was unsophisticated enough to think the Mets should not investigate the man - with whom he himself was not close to  - in sole possession of the vast majority of the team’s money over the years, how does Wilpon possibly possess the level of sophistication and credibility required to continue to run a Major League Baseball franchise in the country’s #1 market?

The answer probably no longer matters.

Today Howard Megdal of CapitalNewYork.com reported of the current financial quagmire facing Wilpon’s Mets:

A $40 million bridge loan from Bank of America, taken out late last November, is due back this month. The minority stakes would also go toward paying a past-due loan of $25 million due back to Major League Baseball, and a portion–likely at least $100 million–of the $430 million debt against the team due back in June 2014.

But while Wilpon assured reporters, yet again, that those other sales were imminent, we are now more than halfway through March without any news on that front.

Then there’s this excerpt from a recent post by Mike Ozanian of Forbes.com that also ponders the immediate solvency of Wilpon’s Mets:

The Mets are praying that their season ticket sales will look good enough by the end of April that they can restructure $430 million of debt due in two years. If not, two sports bankers familiar with the team’s finances I have spoken with believe it is likely the Mets will follow the Dodgers into Chapter 11.

As of this morning you could still buy seats for the Mets home opener against the Braves on April 5 for yourself and 11 of your closest friends - together - in at least three Citi Field sections spanning low-mid-high prices.

New York Mets ticket sales won't save MLB's 'Pon Star' Owner

SbB can also confirm that the full-size image of what is likely the last money shot of baseball’s “Pon Stars” is safe for work.

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

Mets Board Of Director: Madoff Was Family Secret

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.

Bernie Madoff Investments Were Fred Wilpon and Saul Katz Family Secret

(Wilpon and Katz’s family and friends fed at Madoff-backed Mets “profits” trough)

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.

Bernie Madoff Investments Were Fred Wilpon and Saul Katz Family Secret

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

In one such case Mets Board of Directors member and Sterling “Partner” 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 the companies run by Wilpon and his father had so many accounts with Madoff, eventually close to 500, “it was silly to try” to keep their deep financial ties with Madoff a secret from the public.

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

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Mets Letter Confirmed Madoff’s $54M ‘Investment’

The parent company of the New York Mets, Sterling Partners, is currently subject to a lawsuit filed in federal court by the court-appointed trustee representing the countless victims of Bernie Madoff’s Ponzi scheme.

(Wilpon, Mets never spoke to Ruth Madoff about “investment”)

The managing partner of the Mets, Fred Wilpon, is one of the first two defendants named in the “clawback” lawsuit, which seeks $386 million in restitution amid allegations that Wilpon used what he knew was unclean money from Madoff to fund - and leverage - the day-to-day operation of the Mets and other Sterling entities.

Monday a federal court judge ruled that Wilpon and his Sterling Partners must pay $83,309,162 to the victims - via the court-appointed trustee - of Madoff’s Ponzi scheme. The judge also reaffirmed a March 19, 2012 trial date to determine the rest of the $303 million the trustee of Madoff’s victims continues to seek.

As noted in previous sworn depositions relating to the case, Wilpon and son Jeff, who is also heavily involved with the operation of the Mets, both said they never vetted Madoff’s background or investments because of their longtime family friendship.

Though the exhaustive 383-page complaint filed by the trustee of Madoff’s victims last March asserts that the Wilpons willfully ignored red flags that would’ve led any reasonable person - investor or not - to suspect what turned out to be the largest Ponzi in history.

Red flags that included an internal Sterling company audit of Madoff that all but concluded he was engaged in some manner of financial fraud. Though when the Madoff court-appointed trustee requested the documents from that Sterling-commissioned audit of Madoff, the Madoff trustee was told by Wilpon’s company that it was “missing.”

Another example cited in federal court by the Madoff trustee as evidence Fred Wilpon knew Madoff’s business was not legitimate was the seemingly bizarre though brief nature of a $54 million transaction between the Madoffs and the Mets.

Below is the Madoff trustee’s federal court description of how Ruth Madoff’s $54 million “investment” in the Mets helped leverage Wilpon & Co. sufficiently to facilitate starting its own sports television network. 

The New York Mets parent company, Sterling Partners, Knew That Madoff Was Dishonest In His Investment Advisory Business. Madoff and Sterling falsely documented a $54 million bridge loan.

The Sterling Partners had such a close relationship with Madoff that they were willing – together with Madoff – to create a fraudulent letter agreement that falsely described an interest- and cost- free $54 million loan from Madoff as an “investment” by his wife, Ruth.

In May 2004, Sterling sought to buy-out the broadcast rights of the New York Mets from Cablevision to launch the television network SNY. To finance the buy-out, Sterling applied to two banks for loans totaling $54 million.

However, as the deadline for closing the buy-out approached, the Sterling Partners grew concerned that the bank loans would not provide funding in time, so they turned to Madoff.

On or about May 25, 2004, the Sterling Partners inquired with Madoff about making a large redemption from their BLMIS accounts. In response, Madoff told Saul Katz, Fred Wilpon, and Marvin Tepper, in particular, that Sterling’s BLMIS accounts were “in the market” and, as a result, redeeming funds at that time would lower their returns.

As an alternative to such a large redemption from Sterling’s BLMIS accounts, Madoff offered to send Sterling the $54 million needed to finance the buy-out of the broadcast rights.

On or about May 26, 2004, Madoff wired to Sterling $54 million, which was comprised of other people’s money. Shortly thereafter, the bank loans totaling $54 million closed.

On or about May 27, 2004, Sterling repaid the $54 million it had borrowed from Madoff and instead used the bank loan proceeds to finance the buy-out of the broadcast rights.

Although Madoff and Sterling agreed that the $54 million transfer from Madoff was a loan, Sterling prepared on Mets letterhead a letter agreement dated May 25, 2004 from Fred Wilpon and Saul Katz to Ruth Madoff that falsely described the transaction as an investment by Ruth Madoff in the company that would later become SNY.

Sterling Partner Marvin Tepper was involved in the drafting of the May 25, 2004 letter agreement.

The May 25, 2004 letter agreement characterized Madoff’s loan to Sterling as an “investment” by Madoff’s wife, Ruth.

The May 25, 2004 letter agreement provided, in relevant part:

‘This will confirm the conversations with respect to an investment by you [Ruth Madoff] in the Network. Over the years you have invested with us in, among other things, real estate funds; and we contemplate extending this relationship to the Network. . . . You are simultaneously wiring to Sterling Equities Associates the sum of $54 million which is expected to be the approximate amount of your proposed investment with the Network.’

The May 25, 2004 letter agreement also provided for the payment of a premium of some undetermined amount to Ruth Madoff in the event she, Fred Wilpon, or Saul Katz terminated the agreement:

‘If at any time you [Ruth Madoff] or the undersigned [Fred Wilpon and Saul Katz] elect to terminate this arrangement in the sole discretion of the terminating party, the terminating party shall give written notice to the other party and in either of such events, the undersigned shall pay to you the sum of $54 million. In addition, the undersigned shall pay to you a premium to be mutually agreed, having due regard to all the circumstances including, but not limited to, our long and beneficial business and personal relationships.’

The May 25, 2004 letter agreement was signed by Fred Wilpon, Saul Katz, and Ruth Madoff.

Fred Wilpon and Saul Katz, and, upon information and belief, Marvin Tepper knew that the letter falsely described the transaction as an “investment” by Ruth Madoff when in fact it was a no interest, no cost loan from Madoff.

Furthermore, although the letter agreement stated that Fred Wilpon and Saul Katz had conversations with Ruth Madoff regarding the “investment,” neither Fred Wilpon nor Saul Katz ever actually spoke to Ruth Madoff about any investment related to SNY or the predecessor company.

Fred Wilpon, Saul Katz, and Marvin Tepper knew or should have known that it was highly unusual for such a sizable transaction to be supported by only minimal documentation, such as the May 25, 2004 letter agreement.

Fred Wilpon, Saul Katz, and Marvin Tepper knew or should have known that it was even more suspect for the only documentation of such a substantial transaction to not even accurately reflect the true nature of the deal.

The $54 million loan transaction between Sterling and Madoff and the accompanying letter agreement between Saul Katz, Fred Wilpon and Ruth Madoff demonstrate that Saul Katz, Fred Wilpon, and Marvin Tepper were on notice that Madoff would work with them to knowingly falsify a significant business transaction.

The impromptu bridge loan from Madoff allowed Wilpon to ensure, even if they were unable to secure a legitimate bank loan, that the Mets would be able to start a television network from which the Major League Baseball franchise has since financially benefited.

During a July 10, 2010, sworn deposition in New York Fred Wilpon was asked about the documented $54 million transaction involving Ruth Madoff.

Q. Was Ruth Madoff involved in any of these discussions or this discussion, period?
A. No. Not to my knowledge.
Q. I can turn now to the letter that’s in front of you, Exhibit 17. That is your signature at the bottom of the letter, right?
A. I’ve told you that.
Q. So at some point in time you reviewed this letter and you signed it, right?
A. Correct.
Q. So, when you signed this agreement, were there any other signatures on the document when you signed it?
A. I don’t recall.
Q. Don’t remember. When you signed the agreement was there anyone else in the room?
A. I don’t recall that.
Q. How long after the phone call you had with Mr. Madoff where he agreed to wire you $54 million, what was the lag time between that phone call and when you signed this agreement?
A. I have no idea.
Q. Do you remember if you signed this agreement at or around May 25th, 2004?
A. I don’t know.

With the untold, documented leverage and direct funding provided by his financial relationship with Madoff - and the accompanying equity of the Mets - the Wilpons took a modest, family-run company and transformed it into a sophisticated, multi-billion dollar real estate, private equity and hedge fund empire with professional baseball as its centerpiece.

Though when asked during the same, 2010 sworn deposition what he thought of Madoff, Wilpon responded: “There is no person you will talk to, none, that is more betrayed than I am.

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Speed Read: Another Violent Day in LA’s Paradise

The baseball day in Los Angeles started on a solemn note Monday when the Dodgers held two moments of silence for fallen comrades in arms during Chavez Ravine’s opening day Monday (before a third passed later in the day).

Dodger Stadium tributes to Nick Adenhart and Harry Kalas

(Pictures from 710 AM ESPN’s Beto Duran)

By the end of the game (an 11-1 pounderation of the San Francisco Giants, who could not devise a hacky time travel solution with the USS Enterprise despite the cross-promotional gold), the area around Dodger Stadium hosted numerous instances of disrespect to human life through stabbings, gun-waving, fights involving dozens of people, and the stray auto accident.

Of course, we would never draw a correlation between the drop in beer prices at Dodger Stadium and violence around the ballpark. After all, fan-on-fan violence is still seemingly less likely than vendor-on-vendor violence or security-on-fan violence. The relative safety of MLB.com’s At Bat iPhone app is looking better all the time, especially now that it works occasionally.

Another object d’mocktastery best safely seen from a distance that works only occasionally: Isiah Thomas. He’s apparently found a reason to leave the house as Florida International University has shown interest in hiring him as their basketball head coach.

Isiah Thomas suit

(”Look! Look up at that paragraph! It says that someone wants me!  Do you see that?”)

FIU has found a certain comfort level with losing (five straight seasons) and could certainly use the limelight brought by a famous coach. Perhaps Isiah’s excited because he thinks he can ply his trade in a different country unfamiliar with his sordid past. (That’s what the “International” stands for, right?)

Another gentleman of leisure being paid by an NBA team to go away but still looking for a new home will also have to find a new place of leisure as well. At least two of Detroit’s casinos (current count: 439280410) have reportedly tossed Allen Iverson out on his ear for “boorish behavior”, including bodyguard-related scuffling, pouting after a loss, and being generally churlish.

Allen Iverson golfs

(There’s always golf to ruin one’s forced retirement)

So kudos to the MGM Casino and the Greektown Casino for standing up to Allen Iverson’s shenanigans after he’s left town and will likely never return unless absolutely forced to by contract. Also, way to leak the information once the coast is clear.

We once spotted AI in the Omni Hotel in Atlanta, taking over a section of  the open-air lounge and bar to play cards in the late afternoon with his buddies. He did not order from the bar; instead, he had the bellboy bring his crew a beat-up old cooler filled with their own special reserve.

We did not get a chance to see his favorite drink, but we bet he could get it for 25% less this season at Dodger Stadium. Better bring the bodyguards to carry the overflow.

And now our riot police-approved hail of rubber bullets reinforced by the near-certainty there are relatively few industries interested in “boy whisperers”

Which team is the best in all baseball after one week?

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Madoff Victim Hawks Golf Balls With Sleazeball Pic

Walker Manzke lost his job at a hedge fund and a significant amount of money thanks to Bernard Madoff. And probably a lot of friends too, since he encouraged others to invest in Madoff’s $50 billion Ponzi scheme. But now Manzke has come up with a way to get his revenge: selling golf balls with Madoff’s smirking face on them.

Walter Manzke and his Sleazeballs

As MY FOX reports, For the low, low price of $17.95, you can buy three golf balls with a picture of Madoff on them. Someone should send a sleeve or two to Mets owner Fred Wilpon, or maybe Sandy Koufax - I suspect that they both have good reasons to want to get some revenge on Madoff (although thanks to Madoff, it might only be at the local public courses instead of a private club).

Read more…

Did Mets $300 Million Meltdown Sink Soccer Sale?

The Bernard Madoff Ponzi scheme isn’t just impacting American sports: it’s having a chilling effect on teams worldwide. We previously reported that Mets owners Fred Wilpon and Saul Katz lost up to $300 million of their personal fortunes they had invested with Madoff. Now the MANCHESTER GUARDIAN reports that the $50 billion fraud case may have also cost Newcastle United owner Mike Ashley a chance to sell his team.

Mets and Newcastle United burn money

The potential owners were “two wealthy Americans” who were interested in meeting Ashley’s $300 million price tag for the team, one of the largest in the English Premier League. But the buyers backed out after they lost roughly that amount in investments made with Madoff. Wait a second, this sounds awfully familiar. Didn’t I just write that Mets owners Wilpon and Katz lost $300 million to Madoff?

Read more…

Mets Lose $300 Million In Wall Street Fraud Case?

Another day, another crippling blow to Wall Street: Bernard Madoff, former NASDAQ chairman and founder of major investment advisory firm Madoff Securities, was arrested yesterday and charged with fraud, after losing up to $50 billion in a Ponzi scheme. (Not a Fonzie scheme: that involves betting someone you can jump a shark on your water skis.)

Mets money going up in flames

But this scandal could have a deep impact in the world of sports. CNBC is reporting that through their real estate investment firm Sterling Equities, Mets owners Fred Wilpon and Saul Katz may have had as much as $300 million invested with Madoff. That’s about eight Frankie Rodriguez contracts. And it doesn’t look like they’ll be getting much, if any, of that money back.

I wonder if this means that Frank and Jamie McCourt actually have more money than another set of owners now?

Read more…

Blog Jam: Bills Working On Remembering Russert

• INSIDE THE BILLS finds the Buffalo NFL team trying to figure out how to properly pay respects to the late Tim Russert.

Tim Russert bobblehead

• WITH LEATHER gets a kick out of this kid’s kickboxing knockout.

• GOING FIVE HOLE cools off by writing about ice hockey in the Middle East.

• BIG LEAGUE STEW gets their feathers ruffled, as angry Mets fans plan on sending owner Fred Wilpon some chickens.

Read more…