Saul Katz

Last updated
Saul B. Katz
Born (1939-02-17) February 17, 1939 (age 85)
Brooklyn, New York City, U.S.
EducationB.A. Brooklyn College
OccupationReal estate developer
Known forCo-founder of Sterling Equities
Former President of the New York Mets
Associate of Bernie Madoff
SpouseIris Wilpon
ChildrenHeather Katz Knopf
Natalie Katz O’Brien
David M. Katz
Family Fred Wilpon (brother-in-law)

Saul Katz (born February 17, 1939) is a real estate developer, former president of the New York Mets and accused Bernie Madoff co-conspirator.

Contents

Biography

Katz was born to a Jewish family [1] [2] [3] in Brooklyn. [4] He graduated from Brooklyn College in 1960 [5] with a degree in accounting. [6]

Sterling Equities

Katz is a co-founder of Sterling Equities. In 1972, he cofounded Sterling Equities, a commercial real estate development company, with his brother-in-law Fred Wilpon. [7] They built a development of townhouses in Tarrytown, a suburb in Westchester County which was very successful. [8] Seeking to minimize their tax obligations, they purchased real estate throughout the country that had favorable tax treatment [8] which turned out to be a boon since they were unknowingly buying property at the bottom of the market. [8]

Sterling Equities was a significant investor in Bernie Madoff's fraudulent investment fund with 483 accounts. [9] Merrill Lynch warned Saul Katz on several occasions about Madoff's operation, as did numerous other financial professionals. [9] Sterling Equities ignored these warnings collectively receiving $300 million dollars via the Madoff operation ultimately revealed as a fraud. [9] The Madoff fraud collapsed and Sterling Equities owners were sued by the trustee representing the victims of Bernard L. Madoff’s Ponzi scheme who claimed they "knew or should have known Madoff was operating a fraud." [10]

In 2012, it was reported that Sterling Equities was to receive a gift of 23 acres of land from New York City with the intention of developing the land into a shopping mall. The city had recently spent almost $500 million acquiring and improving that same land. [11] The Attorney General of New York, Eric Schneiderman reached a settlement agreement regarding illegal lobbying on behalf of Sterling Equities. [12] [13] In 2015, a New York state court ruled that the because part of the plan involved private development of public parkland it was illegal. [14] By 2018, the plans for a shopping mall had been shelved and the de Blasio administration was supporting a plan centered around affordable housing. [15] The deal was approved by the Queens Borough Board. It will include an acre of open space, an elementary school, and 1100 affordable apartments. [16]

New York Mets

Saul Katz first bought an ownership stake in the New York Mets in 1980. In addition, he served as the President of the Brooklyn Cyclones, a Mets minor league affiliate. [17]

Katz became President of the Mets in 2003. During Katz's time as president of the Mets, it has been reported that sexual harassment was rampant. [18] The culture was described as "rotten." [19] This included bullying a pregnant woman and sending a reporter harassing text messages including photos of an erect penis. Allegedly, the "behavior was widely known in the Mets front office." [18] in 2021, new owner Steve Cohen hired a law firm to look into the accusations of harassment, misconduct, and discrimination during Katz's tenure. [20]

The Mets rarely made money under Katz's leadership. Nearly every dollar the Mets earned passed through Bernie Madoff's investment funds. The collapse of Madoff's fraudulent investment scheme came close to bankrupting the Mets. It also likely contributed to their inconsistent record on the field. The team did not win a World Championship after 1986 and appeared in the playoffs only three times, during 2006, 2015, and 2016, during Katz’s time as President. In 2014, Katz was rumored to be interested in selling his ownership stake in the Mets. [21] Katz and his fellow owners sold a minority stake and, eventually, total ownership in the team. [22]

When the 2020 MLB season was delayed and later shortened due to the COVID-19 pandemic, employees complained about not being paid and not hearing anything from the Mets owners. By comparison, Nets owner Joseph Tsai announced he would be paying non-salaried Barclays Center employees within one day after the NBA season was canceled. [23]

In 2020, a deal to sell the team to hedge fund billionaire Steve Cohen fell through over issues of team control. A similar deal with David Einhorn had fallen through in 2011. [24] In February 2020, it was reported that Katz and his partners were willing to sell the team without maintaining control. In August, Cohen again entered into exclusive negotiations to buy the Mets. In September a deal was reached for Cohen to purchase 95% of the franchise from Katz and the Wilpons for approximately $2.4 billion and on October 30, he was approved by MLB's owners. Katz was then succeeded as president by Sandy Alderson. [25]

Madoff Ponzi Scheme

Saul Katz, Fred Wilpon, and Jeff Wilpon were portrayed as co-conspirators in the Bernie Madoff Ponzi scheme. [26] Sterling Equities and individuals affiliated with Katz and Wilpon received $300 million in respect of investments in the Bernard Madoff Ponzi scheme. [27] Lawyers for the Madoff Trustee cited evidence that Sterling partners shopped for fraud insurance as evidence they were "well aware" that Madoff was carrying out a Ponzi scheme. [28] Wilpon and Katz "categorically reject[ed]" the charge that they "ignored warning signs" about Madoff's fraud. [29] Irving H. Picard, the Madoff Trustee, has alleged that Katz's relationship with Mr. Madoff was extensive and longstanding and that they continued even after suspicions were raised. [30] Picard sued Katz, his partner Fred Wilpon, and Sterling Equities for 1 billion in illegal profits from the scheme. [31] In 2012, Saul Katz, Gregory Katz, Fred Wilpon, Jeff Wilpon and other Sterling Equities partners settled with Picard for $162 million. [32] [33]

Bayou Hedge Fund Group Ponzi Scheme

Saul Katz and his partner and brother-in-law Fred Wilpon were involved in another Ponzi scheme which was orchestrated by Samuel Israel III and they were forced to pay $13 million to investors when Israel's hedge fund collapsed. [34] Through their partnership with Peter Stamos, Sterling Stamos, Wilpon and Katz were accused of withdrawing nearly all of their $30 million investment from the fund immediately before it collapsed. They settled in 2009 for $12.9 million. [35]

Personal life

Katz is married to Iris Katz, sister of the Mets managing partner Fred Wilpon. [8] They have three children: Heather Katz Knopf, Natalie Katz O’Brien, [4] and David M. Katz. [36] The Katzes live in Glen Cove, New York and have a winter home in Boca Raton, Florida. [8] Saul Katz was personally close with Bernie Madoff describing him as "a man who we were friends with for 35 years." [37]

Related Research Articles

<span class="mw-page-title-main">Jeff Wilpon</span> American baseball executive

Jeffrey Scott Wilpon is an American businessman who was an executive vice-president of Sterling Equities, and the owner of the Overwatch League Esports team the New York Excelsior. He is the former COO of the New York Mets baseball team and son of the former principal owner of the New York Mets Fred Wilpon.

<span class="mw-page-title-main">Fred Wilpon</span> American baseball team president

Fred Wilpon is an American real estate developer and former baseball executive. He was principal owner of the New York Mets from 1987 to 2020.

<span class="mw-page-title-main">Bernie Madoff</span> American fraudster and financier (1938–2021)

Bernard Lawrence Madoff was an American financial criminal and financier who was the admitted mastermind of the largest known Ponzi scheme in history, worth an estimated $65 billion. He was at one time chairman of the Nasdaq stock exchange. Madoff's firm had two basic units: a stock brokerage and an asset management business; the Ponzi scheme was centered in the asset management business.

Andrew Madoff was an American financier best known for, alongside his brother, exposing the financial crimes of his father, Bernie Madoff, whose Ponzi scheme has been widely described as the largest and most successful in history.

Mark David Madoff was an American financier who alongside his brother exposed the multi-billion dollar Ponzi scheme committed by his father, Bernie Madoff.

Ruth Madoff is an American former bookkeeper and the widow of Bernie Madoff, the convicted American financial fraudster who served a prison sentence for a criminal financial scheme until his death in April 2021. After her husband's arrest for his fraud, she and her husband attempted suicide in 2008. While she had $70 million in assets in her name, after her husband was imprisoned she was stripped of all of her money other than $1–2 million by the government, and by the trustee for her husband's firm, Irving Picard.

<span class="mw-page-title-main">Frank DiPascali</span> American fraudster (1956–2015)

Frank DiPascali Jr. was an American fraudster and financier who was a key lieutenant of Bernie Madoff for three decades. He referred to himself as the company's "director of options trading" and as "chief financial officer". For a number of years, he played a key part in the daily operation of the Madoff investment scandal, later recounting how he helped manipulate billions of dollars in account statements so clients would believe that they were creating wealth for them.

<span class="mw-page-title-main">Madoff investment scandal</span> Investment scandal discovered in 2008

The Madoff investment scandal was a major case of stock and securities fraud discovered in late 2008. In December of that year, Bernie Madoff, the former Nasdaq chairman and founder of the Wall Street firm Bernard L. Madoff Investment Securities LLC, admitted that the wealth management arm of his business was an elaborate multi-billion-dollar Ponzi scheme.

<span class="mw-page-title-main">Participants in the Madoff investment scandal</span>

Participants in the Madoff investment scandal included employees of Bernard Madoff's investment firm with specific knowledge of the Ponzi scheme, a three-person accounting firm that assembled his reports, and a network of feeder funds that invested their clients' money with Madoff while collecting significant fees. Madoff avoided most direct financial scrutiny by accepting investments only through these feeder funds, while obtaining false auditing statements for his firm. The liquidation trustee of Madoff's firm has implicated managers of the feeder funds for ignoring signs of Madoff's deception.

The recovery of funds from the Madoff investment scandal has been underway since the scandal broke in December 2008. That month, recovery trustee Irving Picard received funds from the Bank of New York account where Bernard Madoff held new investments into his Ponzi scheme. As it has been concluded that no legitimate investments were made on the investors' behalf for at least the last 12 years of operation, recovery has proceeded on a "money in/money out" basis. Investors are entitled to receive no more than the nominal cash amounts that they paid in and did not subsequently withdraw, without regard to inflation, interest, opportunity cost or the false statements that Madoff provided them. Those statements combined to a total balance of approximately $64 billion, while the admitted claims amount to $19.5 billion. As of March 2024, the trustee had recovered $14.7 billion toward these claims through legal action against Madoff associates, feeder funds and beneficiaries of the scheme, and had made fifteen distributions to investors. Action by the Department of Justice recovered an additional $4.3 billion.

<i>American Greed</i> American documentary television series on CNBC

American Greed is an American documentary television series on CNBC. The series focuses on cases of Ponzi schemes, embezzlement and other white collar crimes and features interviews with police investigators, fraud victims and sometimes fraudsters.

<span class="mw-page-title-main">Stanley Chais</span> American financial advisor (1926–2010)

Stanley Chais was an American investment advisor, money manager, and philanthropist. He operated "feeder funds" which collected money for funds related to the Madoff investment scandal. The widow, family, and estate of Chais settled with Madoff trustee Irving Picard in 2016 for $277 million.

Thema International Fund PLC, based in Dublin, Ireland, is a Dublin-listed, Undertakings for Collective Investment in Transferable Securities (UCITS) III-certified, open-end fund incorporated in Ireland, which was launched in December 1996. It created only one sub-fund, the Thema Fund. The fund had a minimum investment requirement of $50,000.

Shana Diane Madoff, sometimes referred to as Shana Madoff Skoller Swanson, is an American former attorney who is now a yoga teacher.

Eric J. Swanson is an American lawyer who worked at the U.S. Securities and Exchange Commission (SEC) and dated and eventually married the daughter of Peter Madoff while the SEC was investigating Madoff's investment firm for what was eventually revealed to be a massive Ponzi scheme. Swanson is currently the Senior Vice President, General Counsel, and Secretary of BATS Global Markets, the third-largest stock exchange in the United States.

Defender Limited is an investment fund. It was incorporated in the British Virgin Islands in 2007. Defender funneled clients' funds to Bernard Madoff's firm as part of a Ponzi scheme run by Madoff. Madoff was arrested in December 2008, and pleaded guilty to fraud in 2009. He is serving a 150-year prison term.

<span class="mw-page-title-main">Sterling Equities</span> American business group

Sterling Equities is a diversified, family-run group of companies based in Great Neck, New York whose portfolio consists primarily of holdings in real estate, sports, and media in the New York area. These include SportsNet New York, the New York Excelsior, Sterling Project Development, and a number of real estate investment portfolios and real estate services businesses. The firm became embroiled in the Bernie Madoff Scandal exposing a relationship between Sterling Equities partners and Bernie Madoff spanning 20 years. The partners eventually settled a billion dollar suit with the Madoff Trustee, Irving Picard, for $161 million.

References

  1. ↑ Record Pilot: "Chabad Bids Shalom...Festival of Lights Illuminates Village Square By Carla Santella Archived 2015-09-23 at the Wayback Machine December 14, 2007
  2. ↑ Jewish Foundation for the Righteous: "On Monday, December 1, 2014, the JFR will honor Iris and Saul Katz with the Foundation’s Recognition of Goodness award" retrieved October 24, 2014
  3. ↑ New York Times: "Paid Notice: Deaths Katz, Rose" September 23, 2003
  4. 1 2 New York Post: "Mets’ owners’ kin made millions from Madoff: suit" By Kathianne Boniello February 6, 2011
  5. ↑ Brooklyn College Foundation Board of Trustees retrieved October 24, 2014
  6. ↑ "Saul B. Katz | TRD Research". therealdeal.com. 14 March 2019. Retrieved 2020-02-15.
  7. ↑ Sports Illustrated: "Pays The Price" by Tom Verducci May 30, 2011
  8. 1 2 3 4 5 The New Yorker: "Madoff’s Curveball - will Fred Wilpon be forced to sell the Mets?" by Jeffrey Toobin May 30, 2011
  9. 1 2 3 "Securities Investor Protection Corporation, v. Bernard L. Madoff Investment Securities LLC" (PDF).
  10. ↑ Cowan, Alison Leigh; Lattman, Peter; Kovaleski, Serge F.; Waldstein, David (2011-01-28). "Trustee Faults Mets Owners Over Madoff Fraud". The New York Times. ISSN   0362-4331 . Retrieved 2021-04-22.
  11. ↑ Gonzalez, Juan (15 June 2012). "Willets Point land a shameful steal of a deal for Mets". nydailynews.com. Retrieved 2021-05-18.
  12. ↑ Rivera, Ray (2012-07-04). "Groups Admit to Lobbying Illegally to Aid Mayor's Plans". The New York Times. ISSN   0362-4331 . Retrieved 2021-05-19.
  13. ↑ Chinese, Vera (3 July 2012). "City economic agencies admit to illegal lobbying in support of Willets Point plan". nydailynews.com. Retrieved 2021-05-19.
  14. ↑ Toure, Madina (6 July 2015). "Appeals court rules Willets Point mall can't proceed – QNS.com". qns.com. Retrieved 2021-05-19.
  15. ↑ Warerkar, Tanay (2018-02-05). "Willets Point megaproject in Queens is back on, with a focus on affordable housing". Curbed NY. Retrieved 2021-05-19.
  16. ↑ "Willets Point progress in 2021" . Retrieved 2021-06-07.
  17. ↑ "Brooklyncyclones.com: Ownership". Archived from the original on 2011-09-18. Retrieved 2012-01-11.
  18. 1 2 Young, Dennis (16 April 2021). "Sandy Alderson, Mets skewered in new report on workplace sexual harassment". nydailynews.com. Retrieved 2021-05-07.
  19. ↑ Ghiroli, Katie Strang and Brittany. "'I've barely hit on you': Inside a Mets culture rotten beyond Mickey Callaway and Jared Porter". The Athletic. Retrieved 2021-05-07.
  20. ↑ Thompson, Jackson. "The New York Mets are accused of ignoring sexual-harassment allegations from team employees in a damning report". Insider. Retrieved 2021-05-07.
  21. ↑ "Report: Katz wants to sell stake in Mets". SNY. Retrieved 2020-02-15.
  22. ↑ Waldstein, David (2021-04-14). "Madoff Nearly Ruined the Mets. The Team Has Moved On". The New York Times. ISSN   0362-4331 . Retrieved 2021-04-20.
  23. ↑ Davis, Bradford William (27 March 2020). "Citi Field workers have not been paid amid coronavirus shutdown: 'How are people supposed to live?'". nydailynews.com. Retrieved 2021-05-02.
  24. ↑ Newman, Kyle (2020-02-07). "Steve Cohen's Bid To Buy The New York Mets Is Dead; What's Next?". Elite Sports NY. Retrieved 2020-02-15.
  25. ↑ Red, Christian. "New York Mets Paid A Heavy Toll For Fred Wilpon's And Saul Katz's Ties To Bernie Madoff". Forbes. Retrieved 4 December 2021.
  26. ↑ O'Keeffe, Teri Thompson, Nathaniel Vinton, Michael (29 January 2011). "Mets owner Fred Wilpon 'distraught' over accusations he profited from Madoff's Ponzi scheme: sources". nydailynews.com. Retrieved 2020-02-15.{{cite web}}: CS1 maint: multiple names: authors list (link)
  27. ↑ Belson, Ken; Sandomir, Richard (March 3, 2011). "Cuomo Has Held Talks With Both Sides in Mets Case". The New York Times. Retrieved March 4, 2011.
  28. ↑ "Mets' owners shopped for fraud insurance: Madoff trustee". InvestmentNews. 2012-03-05. Retrieved 2020-02-27.
  29. ↑ Madoff Trustee: Mets Owners Ignored Ponzi Warning Signs, Chad Bray, The Wall Street Journal , February 4, 2011, Retrieved February 4, 2011.
  30. ↑ "Bernard L. Madoff: Master of the Ponzi Scheme" (PDF).
  31. ↑ "Timeline of Wilpon family's ownership of Mets". December 4, 2019. Retrieved 2020-02-15.
  32. ↑ Vardi, Nathan. "Mets Owners Settle Madoff Claims For $162 Million". Forbes. Retrieved 2020-02-27.
  33. ↑ "United States District Court – Southern District of New York – Irving H. Picard, Trustee for the Liquidation of Bernard L. Madoff Investment Securities LLC, v. Saul B. Katz, et aI" (PDF).
  34. ↑ Cowan, Alison Leigh (2011-01-30). "For Mets Owners, a Costly Precursor". The New York Times. ISSN   0362-4331 . Retrieved 2020-02-27.
  35. ↑ "Report: Wilpons invested in another Ponzi". ESPN.com. 2011-01-31. Retrieved 2020-02-27.
  36. ↑ Dunlap, David W. (March 20, 1994). "In Real Estate, New Faces, Old Names". The New York Times.
  37. ↑ "Bernie Madoff, Fred Wilpon and The Mets: A 35-Year History". ABC News. Retrieved 2021-04-13.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.