January 8, 2009 | 8:25 pm
Posted by Brad A. Greenberg
Even though they lost whatever was left in their account, Madoff investors who took money out over several years or decades may actually have made off with money Madoff received from others, the AP reports:
The many Bernard Madoff investors who withdrew money from their accounts over the years are now wrestling with an ethical and legal quandary.
What they thought were profits was likely money stolen from other clients in what prosecutors are calling the largest Ponzi scheme in history. Now, they are confronting the possibility they may have to pay some of it back.
The issue came to the forefront this week as about 8,000 former Madoff clients began to receive letters inviting them to apply for up to $500,000 in aid from the Securities Investor Protection Corp.
Lawyers for investors have been warning clients to do some tough math before they apply for any funds set aside for the victims, and figure out whether they were a winner or loser in the scheme.
Hundreds and maybe thousands of investors in Madoff’s funds have been withdrawing money from their accounts for many years. In many cases, those investors have withdrawn far more than their principal investment.
“I had a call yesterday from a guy who said, ‘I’ve taken out more money then I originally put in, but I still had $1 million left with Madoff. Should I file a $1 million claim?’” said Steven Caruso, a New York attorney specializing in securities and investment fraud. “I’m hard-pressed to give advice in that situation,” Caruso said.
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