Madoff Trustee Sues Jewish Association for $5.2 Million

Trustee Irving Picard lost his bid to claw back six years of Ponzi proceeds from the New York Mets owners last month, when U.S. District Judge Jed Rakoff cut a $1 billion suit by two- thirds, saying he could take back only two years of withdrawals.

In today’s suit against the Jewish Association, filed in U.S. Bankruptcy Court in New York, Picard said he’s entitled to claim six years of transfers under state and federal laws. The trustee last week asked Rakoff to allow him to appeal the Mets ruling.

“It suggests that he thinks he can get the Rakoff ruling overturned,” said Stephen Lubben, a bankruptcy law professor at Seton Hall University in Newark, New Jersey, who posted comments about last month’s ruling on a blog, Credit Slips.

Picard said in court papers last week that Rakoff’s ruling on his lawsuit against the Mets owners, Fred Wilpon and Saul Katz, “arbitrarily” gave them some of the confidence man’s investors fictitious profits from the Ponzi scheme that “all customers were previously denied” by a higher-court ruling.

According to Rakoff, Picard can’t take back so-called settlement payments made by the Madoff brokerage to its customers. Picard is free to try to take two years of withdrawals, he ruled.