NEW YORK, July 7 A Manhattan federal judge has
limited the ability of the trustee seeking money for victims of
Bernard Madoff's Ponzi scheme to recoup sums that may have been
fraudulently transferred outside the United States.
In a decision on Sunday, U.S. District Judge Jed Rakoff said
the trustee, Irving Picard, could not invoke federal bankruptcy
law to recover money transferred outside the United States
between foreign entities, citing a presumption that the law does
not apply extraterritorially.
According to court records, the decision affects several
dozen lawsuits brought by Picard, who is liquidating Bernard L.
Madoff Investment Securities LLC.
Many involve transfers by non-U.S. "feeder funds" that
typically funneled customer money to Madoff, but which in these
cases withdrew money from his firm and sent it elsewhere.
A spokeswoman for the trustee had no immediate comment on
Monday. Rakoff's chambers on Monday confirmed the authenticity
of the decision, which was not available on the public docket.
Last week, the U.S. Supreme Court rejected a request by
Picard to review the dismissal of his claims against banks he
accused of enabling Madoff's fraud.
Picard has recovered about $9.82 billion for former Madoff
customers who lost roughly $17.5 billion of principal.
The Ponzi scheme was uncovered in December 2008. Madoff, now
76, pleaded guilty in March 2009 and is serving a 150-year
The case is Securities Investor Protection Corp v. Bernard
L. Madoff Investment Securities LLC, U.S. District Court,
Southern District of New York, No. 12-mc-00115.
(Reporting by Jonathan Stempel in New York; Editing by Lisa Von