Thema International Reaches $687M Settlement Over Madoff Ponzi Scam

Bernard L. Madoff Investment Securities LLC trustee Irving H. Picard announced that a settlement has been reached for $687M with Thema International Fund for its ties to the multibillion-dollar Madoff Ponzi Scam. Now, a court must approve the agreement.

According to Bloomberg, the “Irish investment fund funneled $1.1B” to the Ponzi scam that bilked thousands of investors, including those who were with offshore feeder funds, of billions of dollars over several decades. The $687M is representative of all the funds transferred from Madoff’s securities firm to Thema International prior to the former’s collapse, in addition to 19.26% of the withdrawals beyond that time period.

Thema International Fund belongs to a number of offshore entities with ties to Madoff friend and Austrian banker Sonja Kohn and the Benbasset family of Switzerland. Picard contends that Kohn and the Benbassets granted Madoff key access to funds as his Ponzi scam began to fail.

As Bloomberg reports, the Benbassets set up Hermes International Fund Ltd. And Lagoon Investment Ltd., which were their first Madoff feeder funds in 1992. According to Picard, Thema International set up its Madoff account in 1996 via a custody bank in Bermuda.

Court records indicate that advisory and management fees for the funds was approximately $221M. The Benbassets are accused of steering about $1.9B to Madoff. Bank Medici, which was the investment manager for Thema and where Kohn served as chairwoman, was shut down by regulators in Switzerland after the Madoff Ponzi scam came to light.

Madoff, who pleaded guilty to criminal charges accusing him of masterminding the Ponzi scam, is serving over 150 years behind bars. Meantime, Thema maintains that it did not engage in wrongdoing. It sued HSBC Holdings Plc (ADR) for not examining Madoff’s securities firm and the way it was run. The lender paid Thema investors $62M as part of its settlement.

Thema Fund Ltd. And a number of its affiliates had previously settled with Picard over the Ponzi scam for $130M. Lagoon and related funds settled for $240M in 2013.

Approval of this latest agreement in Picard’s efforts to recover funds stolen in the Madoff Ponzi fraud would mean that approximately $12.7B of what investors were bilked has been recovered. That’s approximately 72% for each dollar in principal that was lost in the scheme.

In total, investors are estimated to have lost more than $17.5B. Picard has been trying to recover their funds by filing lawsuits against funds and customers that did make money with Madoff.

Madoff’s Ponzi scam affected investors from all walks of life, including retail investors, wealthy investors, celebrity investors, and institutional clients. That it went on for years undetected is disturbing.

Former NY Restaurateur Gets Prison Term for $12M Ponzi Scam
Unfortunately, there continue to be Ponzi scams that bilk investors of their money. Just this week, an ex-NY restaurateur was sentenced to five years behind bars for running a $12M Ponzi fraud. Hamlet Peralta, formerly the owner of Hudson River Café in the city of Harlem, had pleaded guilty earlier this year to bilking investors while pretending to run a wholesale liquor business. Instead, Peralta used the funds, including over $5M that came from just one investor, to pay back other investors and to cover his own spending.

In addition to his prison term, Peralta must bay over $5M in restitution.

Please contact The SSEK Partners Group today and we can help you determine whether you have grounds for a claim.

Madoff Investors Recover 72% of Losses With New Trustee Deal, Bloomberg, September 6, 2017