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Koch Brothers Made $21.5 Million From Investments With Bernie Madoff, But Will They Get To Keep The Money?

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Koch Brothers Made $21.5 Million From Investments With Bernie Madoff, But Will They Get To Keep The Money?

Charles and David Koch are billionaire brothers that run Koch Industries. They're known for their savvy investments in various sectors, but one of their investments may have flown under the radar: An investment with Bernie Madoff.

The Koch brothers invested an unknown amount of money with Madoff and was given a return of $21.5 million prior to his arrest in 2008 for running a ponzi-scheme. Since the Koch brothers received a profit under false pretenses, investigators and legal experts are fighting to get the money back.

According to Bloomberg, the trustee liquidating Madoff's firm Irving Picard is arguing that the cash the Koch brothers received is fraudulent and should be given to the thousands of victims that Madoff stole money from.

The Koch brothers, along with other early investors in Madoff's fund, argue they should be able to keep the profits because the cash was sent overseas and not subject to U.S. jurisdiction. For example, the Koch brothers' money was sent to a fund based in the British Virgin Islands and then made its way to a Koch entity in Britain.

"The Koch entity involved made an investment in an entirely separate fund," Bloomberg quoted a Koch spokesman Rob Carlton as saying in an e-mail. "That Koch entity no longer exists, and its investment was redeemed in 2005, long before anyone knew of Madoff's fraud."

On the other hand, Picard will argue that the Koch brothers' UK asset "had no employees or operations in the United Kingdom, and was operated and managed entirely from the United States,"

Picard's plan "makes sense since it's so easy to move money outside the United States," Joelle Scott of investigative due diligence firm Corporate Resolutions told Bloomberg. "I'd be surprised if the judge shut him down."

 

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