Clients of Bernard Madoff who were lucky enough to withdraw part or all of their investment before the money manager confessed to a $50 billion Ponzi scheme are now concerned that they will have to give their money back, according to a Bloomberg report.
The former investors — which include individuals, charities and hedge funds — in his brokerage firm, Bernard L. Madoff Investment Securities LLC of New York, could potentially face lawsuits due to a New York state law that would call for a claw-back of paid-out funds.
Under the law, a trustee could be sued on behalf of other victims to redeem profits, principal and securities going back six years, Tracy Klestadt, a partner at New York-based law firm Klestadt & Winters LLP, told Bloomberg.
One client, a 53-year-old restaurant owner in Florida, who asked not to be identified in the report, withdrew about $600,000 this year from his $1.5 million account.
The investor, who opened an account with Mr. Madoff five years ago, said he detected no hint of fraud and would go to jail rather than give back the money.
Mr. Madoff confessed to employees that his "giant Ponzi scheme" may have cost investors as much as $50 billion, according to an FBI complaint.
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