NEW YORK (Reuters) - New York Mets principal owner Fred Wilpon was sued on Friday over alleged losses suffered by retirement plan participants at his firm Sterling Equities.
The complaint filed Friday in Manhattan federal court said Sterling invested $16.2 million, or 92 percent, of the 401(k) plan’s $17.6 million of assets with Madoff.
It accused Wilpon and two other plan trustees of breaching their fiduciary duties to plan participants by mishandling investments with Madoff and his firm Bernard L. Madoff Investment Securities LLC.
The complaint seeks class-action status on behalf of plan participants, a number it estimates in the hundreds. There were 267 participants at the start of 2008, the complaint said.
Lawyers for the plaintiff and Sterling did not immediately return calls seeking comment. A call to Wilpon’s office was not immediately returned.
The complaint was filed by Elyse Goldweber, a New Yorker who said she had $280,420 invested in her late husband’s individual 401(k) plan. A majority of this sum was invested directly with Madoff and has been “wiped out,” she said.
“While defendant Wilpon has been quoted as claiming that he and his business family are ‘fine,’ his loyal employees (many of whom had previously been laid off) have lost their retirement savings,” apart from some insurance money that “does not come close” to covering losses, the complaint said.
The lawsuit seeks to recover losses arising from the defendants’ breaches, and other remedies.
In October 2009, Irving Picard, the court-appointed trustee liquidating Madoff’s investment firm, said Mets LP, a team affiliate, withdrew $47.8 million more from Madoff’s firm than it put in. Picard has been trying to recover money from such former clients, whom he considers “net winners.”
Madoff, 72, was arrested on December 11, 2008, and pleaded guilty three months later to running an estimated $65 billion Ponzi scheme. He is serving a 150-year sentence in a North Carolina federal prison.
The case is Goldweber v. Sterling Equities Associates et al, U.S. District Court, Southern District of New York, No. 10-05786.
Reporting by Jonathan Stempel in New York, editing by Matthew Lewis