Sports News Without Fear, Favor or Compromise
Sports News Without Fear, Favor or Compromise

Mets Excel At Ponzi Schemes, Nothing Else

Illustration for article titled Mets Excel At Ponzi Schemes, Nothing Else

So what if the New York Mets have finished fourth in the NL East in back-to-back seasons? So what if Oliver Perez and Luis Castillo are due a combined $19 million this year? The Mets are baseball's best at timing Ponzi schemes.


Today's New York Times brings word that Mets owners Fred Wilpon and Saul Katz — who already are looking to sell 25 percent of the team because of the fallout from Bernard Madoff's Ponzi scheme — paid back nearly $13 million after a similar fraud was busted in 2005.

In that case, Sterling Stamos, the Wilpon/Katz fund, invested nearly $30 million in Samuel Israel III's Bayou hedge fund over a span of two years. But Sterling Stamos, acting on a tip, withdrew almost all of its investment a few months before Bayou ceased operations. In 2008, Israel faked a suicide and ran from the feds. Now he's serving a 22-year sentence.

Of course, since Sterling Stamos withdrew more than did any other investor from Israel's phony fund, those who lost in Bayou's eventual bankruptcy went after Wilpon and Katz, alleging that Sterling Stamos knew about an impending bankruptcy. Wilpon and Katz argued in court that they had "philosophical differences" with Israel and could not have anticipated the fund's collapse. Sterling Stamos eventually settled with Israel's victims for $12.9 million.

The Bayou debacle eerily resembles the Madoff case — ingenious timing from Wilpon and Katz, willful ignorance toward the funds' red flags. (Ironically, Peter Stamos, a partner in the Sterling fund that invested in Bayou, relayed concerns about Madoff to Wilpon and Katz.) Except, with Madoff, the victims are seeking at least $300 million in fictitious profits from the Mets' owners.

All of this is to say: huh? What have the Mets ever timed correctly? This is the team that traded Billy Wagner in late August 2009, gifting the Red Sox two compensatory draft picks, and sat on Lastings Milledge until his value dwindled into Brian Schneider and Ryan Church. And these are the owners that kept Omar Minaya in power until 2010. But, oh, how they wriggle away from Ponzi schemes just in the nick of time! Hooray for Fred Wilpon and Saul Katz!

And now the Madoff victims, just like Israel's, want their money back. Oh well. Even in investing, the Mets are a good bet to fall all over themselves down the stretch.


For Mets Owners, a Costly Precursor [NYT]