Alison Cowan of the New York Times reports that the Bernie Madoff affair was not the first time the Wilpons have had to pay back money as a result of getting in early on a Ponzi scheme:
But for the owners, Fred Wilpon and Saul Katz, it is not the first time they have had their names and personal fortunes roughed up in a Ponzi scheme. An investment firm started by the two men had to pay back nearly $13 million two years ago when a hedge fund run by the scion of a wealthy New Orleans family collapsed in what was then regarded as one of Wall Street’s more brazen frauds.
I spent two years of my professional life defending a guy convicted of running a $50 million fraud, and part of that involved a number of mini-ponzi schemes and other assorted activities. One thing I learned is that a great number of the victims of such schemes are people who really like the idea of getting rich quick and who, either out of simple negligence or out of willful blindness, are eager to give their money to someone who promises quick and/or outsized returns on investment. Yes, some people are truly innocent victims, with the fraudsters creating elaborate schemes which withstand a reasonable amount of due diligence by the investor. But often times people are willing to skimp on the diligence because they are so dazzled by the prospect of boffo returns.
I have no idea where the Wilpons fall in all of this. But I do know that it’s not often that investors get burned by not just one, but two ponzi schemes. Especially allegedly sophisticated investors like the Wilpons.
Five years ago, Octavio Dotel retired following a 15-year career in which he pitched for a then-record 13 different teams. I’m not exactly sure what he’s been up to since then, but I know that today he got arrested, as did former Marlins, Twins and Mets second baseman Luis Castillo.
That’s the report from Héctor Gómez, and from the Dominican Today, each of whom report that the two ex-big leaguers were arrested today in connection with a longstanding money laundering and/or drug investigation focused on one César Peralta. also known as “César the Abuser.” So he sounds fun. Gómez characterizes it as a money laundering thing. Reporter Dionisio Soldevila characterizes it as “drug trafficking charges.” Such charges often go hand-in-hand, of course. I’m sure more details will be come out eventually. For now we have the report of their arrests. According to the Dominican Today, four cars belonging to Dotel were confiscated as well.
Dotel didn’t debut until he was 25, and for his first couple of years with the Mets and Astros he struggled to establish himself as a starter. He was switched full-time to the Houston bullpen at 27, however, and went on to make 724 relief appearances with a 3.32 ERA and a .207 opponents’ batting average while racking up 955 strikeouts in 760 innings. At the time of his retirement his career strikeout rate — 10.8 per nine innings — was the best in the history of baseball for right-handed pitchers with at least 900 innings, edging out Kerry Wood and Pedro Martinez.
Castillo also played 15 seasons, with a career line of .290/.368/.351. He was a three-time All Star and won three Gold Glove awards.