Friday, July 3, 2009

Should Charities Repay Their Madoff Money?

Bernard Madoff was sentenced to 150 years in federal prison this week for his fraudulent Ponzi scheme investment operation. While many charitable organizations lost millions upon millions of dollars by investing with him, there are some charities that, in fact, profited from their involvement with Madoff. Writing on the New York Times website Deal Book blog, “Deal Professor” Steven M. Davidoff asks two questions regarding this situation: “First, did charities on the whole benefit from Mr. Madoff’s crime? And second, do these innocent charities have a moral or legal obligation to return the money? He also suggests that, “Under the law of fraudulent conveyance, there is a six-year lookback, and they could conceivably be sued to return the money. However, traceability of the money here will be a problem, and in many cases protect the charities.” Click here to read the whole posting.

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