WHAT HAPPENED: The owners of the New York Mets have settled with trustee Irving Picard for $162 million, their alleged profit from certain Ponzi scheme funds in the six years before Bernard Madoff's arrest. 
 
 In reality, Fred Wilpon and family will be on the hook for only a fraction of that amount -- and will not be required to make any payments until 2016 and 2017. 
 
 That's because, as part of the settlement, the Wilpons will be able to apply to the trustee to be reimbursed for $178 million in losses from certain funds. Obviously, like any victims of Madoff's Ponzi scheme, they won't recover every dollar. But they will get a certain percentage based on how much the trustee collects overall from net winners -- likely 50 percent or more. 
 
 As a result, the Wilpons' actual payment to Picard -- once the Wilpons' loser funds are reimbursed like other victims -- should be a fraction of the actual $162 million settlement. 
 
 Say if Picard pays to victims 50 cents on the dollars they lost. That means the Wilpons could be credited $89 million (half of $178 million) toward their $162 million owed as a result of the settlement. That's a net of only $73 million remaining to pay Picard to satisfy the settlement. 
 
 Any disbursements owed by Picard to Wilpon loser funds over the next three years will be deducted from the $162 million owed by the Wilpons to Picard in the settlement. The Wilpons then will owe the remaining amount in equal installments in four and five years. 
 
 The lawsuit sought to recover $386 million. Judge Jed S. Rakoff previously had decided that Picard likely was entitled to at least $83.3 million in profits from the two years before Madoff's arrest. 
 
 The original suit was for $1 billion, but it was reduced by Rakoff, who decided that Picard could only recover money from the Wilpons from the immediate two years before Madoff's arrest, not the six years Picard advocated. The settlement, while not overturning Rakoff's decision, does establish for the trustee six years as an acceptable period to recover profits. 
 
 The settlement talks were brokered by former New York governor Mario Cuomo. 
 
 WHAT IT MEANS: It's unlikely the Wilpons would have settled unless they felt they could withstand that financial obligation without jeopardizing their ownership of the team. 
 
 Still, the Wilpons are not out of the woods yet as owners. 
 
 Remember, the Mets still have a ton of debt unrelated to the lawsuit. Among the more immediate obligations are a $40 million bridge loan from Bank of America and $25 million emergency loan from Major League Baseball. UPDATE: The Mets have paid those immediate loan obligations thanks for a $240 million equity infusion from minority investors, many of which had existing ties to the ballclub. 
 
 You can read about the extent of the debt in Part 1 and Part 2 of the financial series from ESPNNewYork.com from late January. 
 
 WHAT'S NEXT: Back to baseball, hopefully. 
 
 Actually, it's going to still be the Mets on austerity for a while, because of the financial obligations mentioned above. That means the Wilpons will be utterly dependent upon fan attendance revenue in order to maintain ownership. 
 
 The Mets eventually hope to sell 10 to 12 minority shares of the team at $20 million apiece, although a good deal of that appears to be shifting around money among Mets-related entities. For instance, two of those shares are going to Jeff Wilpon and Saul Katz, who is Fred Wilpon's brother-in-law and Mets president. Another four will go to SportsNet New York, the regional sports channel primarily owned by the Wilpons/Mets. 
 
 There is only one known minority buyer without direct connection to the Wilpons or Mets. And that's Steve Cohen, who reportedly is the front-runner for majority ownership of the Los Angeles Dodgers, which would eliminate him as a Mets candidate. 
 
 Read the ESPNNewYork.com news story here. ||||| “I can’t wait to get back to our businesses, which I love, and the first order of business, the first priority, is getting down to Florida tomorrow, getting to that spring training camp and bringing the Mets back to the prominence our fans deserve,” a clearly relieved Mr. Wilpon said outside federal court in Manhattan . 
 
 Mr. Picard was appointed by a bankruptcy judge in 2008 to recover money for Mr. Madoff’s victims. To date, he has secured some $9 billion — or about half his goal — much of it from Madoff investors he has asserted were unjust beneficiaries of “too good to be true” returns. 
 
 In his lawsuit against Mr. Wilpon and Mr. Katz, Mr. Picard asserted that the men were sophisticated investors who were among those illegitimate beneficiaries. But Mr. Picard suffered a number of setbacks. The lawsuit was removed from bankruptcy court, and Jed S. Rakoff of the United States District Court, who took over the case, both reduced Mr. Picard’s financial claims and raised the legal bar he would have to clear in order to collect. 
 
 Still, if Mr. Picard had prevailed at trial, he could have recouped as much as $303 million, in addition to the $83 million the Mets’ owners were already ordered to pay. 
 
 His decision to settle for much less was regarded by a number of experts as a kind of surrender on the explosive assertions that were central to the case. Legal experts said the settlement would most likely embolden other defendants who are fighting accusations brought by the trustee. Mr. Picard has filed several large suits that have accused defendants of misconduct, including actions against some of Mr. Madoff’s relatives and one of his primary banks , JPMorgan Chase . The cases make similar bad-faith claims to the one brought against the Mets’ owners. 
 
 “I certainly consider this a capitulation by the trustee,” said Bradley D. Simon, a former federal prosecutor who focuses on white-collar civil litigation for Simon & Partners. “It seems quite one-sided.” 
 
 The Mets, as a baseball operation, still face significant financial trouble. The club has lost some $120 million over the past two years, has had to slash its payroll as attendance has fallen at Citi Field , and has had to put a portion of the team up for sale. 
 
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 But the resolution of the suit, and on such favorable terms, ends an enormous financial threat. 
 
 “That decision removed the defendants from the sword of Damocles hanging over their lives,” Mario M. Cuomo , the former New York governor who was appointed as the mediator in the case in early 2011, said outside the courtroom. “And it will enable them to return to their work, their family and normalcy.” 
 
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 Mr. Cuomo, who has been mediating high-profile disputes for decades, had not appeared to make much progress as the lawsuit, complete with acrimonious filings, ground on. 
 
 But with the case headed for trial, Mr. Cuomo evidently finally made headway. 
 
 About two weeks ago, he reached out to both sides, inviting Mr. Wilpon and Mr. Katz to his offices at the law firm Willkie Farr & Gallagher. He suggested to Mr. Wilpon and Mr. Katz that a trial could be both embarrassing and damaging to their reputations, and in a separate conversations he lobbied the trustee to come to a settlement. 
 
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 “What you do in mediation is recite the realities,” Mr. Cuomo said later in the day during an interview, speaking of his role. “You don’t have to be brilliant. It’s called common sense.” 
 
 The settlement itself underscores how complicated the Madoff bankruptcy has proved to be. 
 
 Mr. Wilpon and Mr. Katz, as well as their business partners and family members, had hundreds of accounts with Mr. Madoff’s firm when he was arrested in December 2008. 
 
 The trustee had identified many of those account as “net winners” — asserting that the owners of those accounts had over the years withdrawn more money from them than they had put in. He argued that, in fact, those profits were “other people’s money,” and had to be returned. 
 
 Mr. Wilpon and Mr. Katz contended that they also had scores of accounts that were “net losers,” and they had applied to the very same trustee who was suing them to be reimbursed for those losses. 
 
 The settlement announced Monday amounts to a swap: Mr. Picard dropped the claims that the men had ignored warnings about Mr. Madoff; Mr. Wilpon and Mr. Katz agreed that they were obligated to pay back $162 million in so-called fictitious profits they had reaped from the net winner accounts from 2002 to ’08. That figure includes the $83 million that Judge Rakoff had earlier ordered them to pay. 
 
 How much of that $162 million the men will ultimately have to pay depends, oddly, on how successful Mr. Picard is in his efforts to recover money for Madoff victims. The Mets’ owners had applied to Mr. Picard to be reimbursed $178 million from their net loser accounts. If Mr. Picard’s recoveries do not yield $162 million after three years, Mr. Wilpon and Mr. Katz have guaranteed to pay as much as $29 million. 
 
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 What was clear was that Mr. Wilpon and Mr. Katz used the settlement as vindication of their character. “We acted in good faith and we’re very pleased that this settlement bears that out,” Mr. Wilpon said. 
 
 For the trustee, the settlement appeared to be a business calculation: even if he could win a judgment that Mr. Wilpon and Mr. Katz were willfully blind to Mr. Madoff’s fraud — and have the verdict upheld on appeals that might take two or three years — he might not have received the $303 million he was seeking. 
 
 “It isn’t whether we win or lose,” David J. Sheehan, chief counsel to the trustee, said. “It’s whether we enhance the fund and help the victims. That’s what we did today, and that’s why we did it.” 
 
 Mr. Sheehan’s remarks Monday conflicted with much tougher ones made 13 months ago, when he said, “What we’re looking for is a billion dollars, and unless we settle for less than that, which we’re not inclined to do, where they get the money is of no moment to us.” 
 
 Mr. Picard might also have had second thoughts about the strength of his case. Judge Rakoff had been skeptical that Mr. Picard could successfully rebut Mr. Wilpon and Mr. Katz’s claims that they acted in good faith in their investing with Mr. Madoff. 
 
 Still, however strong Sheehan and Picard felt their case was, they could not be certain of victory. 
 
 “Any lawyer who walks into court knows that you can win, you can lose, and you can have the strongest case possible but you don’t know how the evidence will come in or how the jury will perceive the credibility of the witnesses,” said Annemarie McAvoy, a former federal prosecutor who is an adjunct professor at Fordham Law School. She said Mr. Picard “did away with the risk of walking away with nothing at the end of the trial.” 
 
 As he read aloud the terms of the settlement between two parties who had battled each other bitterly for more than a year, Judge Rakoff said, “All I say is love is wonderful.” ||||| Bloomberg News 
 
 A prominent Austrian banker who portrayed herself for two years as one of Bernard L. Madoff’s biggest victims was accused on Friday of conspiring for 23 years to funnel more than $9 billion into his immense global Ponzi scheme. 
 
 The accusations were made in a civil lawsuit that sought damages of $19.6 billion — the sum of the cash lost in a fraud that wiped out nearly $65 billion in paper wealth and ruined thousands of investors on almost every rung of the economic ladder. 
 
 The central defendant in the complaint is Sonja Kohn, who was the hub of a complex network of European and Caribbean funds that channeled money to Mr. Madoff. A well-connected banker in her native Vienna, Ms. Kohn insisted she never suspected her trusted friend was running a global Ponzi scheme. 
 
 In reality, according to the complaint, she knowingly raised billions of dollars in cash to sustain Mr. Madoff’s fraud in exchange for at least $62 million in secret kickbacks — payments she insisted be handed over face to face and never put in the mail. The lawsuit says that her collusion was so pivotal to the fraud that Mr. Madoff tried to destroy evidence of their connection before his arrest in 2008. 
 
 The civil complaint against Ms. Kohn was part of a fusillade of litigation filed in federal bankruptcy court in Manhattan during the last month by Irving H. Picard, the trustee trying to recover assets for victims who sustained cash losses in the fraud. 
 
 The trustee has until midnight Saturday — the second anniversary of Mr. Madoff’s arrest — to file any lawsuits seeking to recover cash withdrawn from the Ponzi scheme before its collapse. 
 
 Mr. Picard has recently sued more than a dozen major banks, including UBS and HSBC, which served several hedge funds that invested with Mr. Madoff; Citibank and Nomura, among seven banks that sold derivatives linked to Madoff feeder funds; and JPMorgan Chase, Mr. Madoff’s primary banker during the years of his fraud. The banks have denied any responsibility for the fraud. 
 
 Other near-deadline lawsuits were filed against the founders and corporate parents of the Tremont Group, a primary Madoff conduit for pension funds and individual investors, and individuals associated with Mr. Madoff’s London affiliate, including members of Mr. Madoff’s family. [On Saturday, Mr. Madoff’s older son, Mark Madoff, was found dead in a suicide.] 
 
 On Monday, Mr. Picard filed a sealed complaint against business entities connected to Fred Wilpon, the owner of the New York Mets baseball team, but confirmed that settlement negotiations were under way in the case. In a statement, Sterling Equities said that the baseball team would have all the resources it needed to “fully compete and win” regardless of the outcome of the talks. 
 
 Hundreds of lawsuits have been filed against other investors who withdrew fictional profits from their Madoff accounts over the years, but Mr. Picard said on Friday that he intended to dismiss any complaints filed against investors who could qualify for a “hardship” exemption based on their financial circumstances. 
 
 All told, Mr. Picard has filed lawsuits seeking to recover more than $50 billion in cash — much more than the approximately $2 billion he has so far recovered. Many of these cases will be hard-fought courtroom battles that could last for years, but some defendants are known to be negotiating possible settlements. 
 
 While it is difficult to estimate how much of that $50 billion Mr. Picard may ultimately recover, even a final recovery of just $10 billion — which people familiar with the settlement talks say seems feasible — would provide 50 cents on the dollar to those with cash losses. That is considerably more than seemed possible in the weeks and months immediately after Mr. Madoff’s arrest. 
 
 That will be little comfort for the thousands of investors who are not eligible for compensation because they withdrew more from their Madoff accounts than they had invested. Similarly, thousands of investors whose money was channeled to Mr. Madoff through feeder funds are still uncertain about their status in the bankruptcy case. That issue is one of many knotty questions that remain to be resolved in court. 
 
 But even in a crowded court docket, the civil complaint filed Friday against Ms. Kohn stands out — both for the size of its claim for damages and for its stark accusations of criminal behavior. 
 
 “In Sonja Kohn, Madoff found a criminal soul mate, whose greed and dishonest inventiveness equaled his own,” said Mr. Picard, the trustee. 
 
 The complaint did not disclose where Ms. Kohn was currently residing, and her lawyers in Vienna did not respond to several requests for comment on Friday. But in previous statements, Ms. Kohn has denied all accusations that she was complicit in Mr. Madoff’s fraud. 
 
 Both Bank Austria and its current owner, UniCredit, Italy’s largest bank, are named as defendants in this lawsuit — which cites their ties to Ms. Kohn — and in the earlier complaint filed against HSBC, the global bank based in London. 
 
 UniCredit said in a statement on Friday that its policy was not to comment on litigation but that it intended to vigorously defend itself against the accusations made against it and its Bank Austria unit. The 157-page complaint claimed that about half the Ponzi scheme’s stolen funds — $9.1 billion out of an estimated $19.6 billion — was directly attributable to Ms. Kohn, her family members and their elaborate portfolio of feeder funds. 
 
 The amount makes “these actors arguably the single most critical building block — the ‘sine qua non’ — of the Ponzi scheme,” said Timothy S. Pfeifer, a partner at Baker & Hostetler, the trustee’s law firm. 
 
 The lawsuit is the first brought by Mr. Picard to include accusations that defendants violated the Racketeer Influenced and Corrupt Organizations Act, a federal law originally enacted to combat organized crime. Better known as RICO, the statute is a powerful tool that provides a means for corralling far-flung but interconnected entities into a single lawsuit. It also permits the recovery of triple damages. 
 
 When the fraud was first uncovered, Ms. Kohn seemed to personify a certain elegant breed of the desolate species known as “Madoff victims.” 
 
 A self-made woman, she was a well-connected banker in Vienna and a tireless navigator of the quiet oceans of wealth flowing through European society. With a bouffant red wig and a combative personality — and armed with fluency in four languages and a gilded Rolodex of socialites, industrialists and financiers — she stood out in the conservative world of European private banking. 
 
 “She characterized herself as ‘Austria’s woman on Wall Street’ and the gateway to Madoff,” the complaint said. 
 
 Ms. Kohn first met Mr. Madoff in 1985 when she was living in Monsey, N.Y., and working as a stock broker at Merrill Lynch. She was introduced to him through an executive at Cohmad Securities, a Madoff-related brokerage firm that has also been sued by Mr. Picard. 
 
 In 1993, Ms. Kohn left New York and returned to Austria to tap the rich vein of European wealth for Mr. Madoff. 
 
 The lawsuit asserts that Ms. Kohn knew from the beginning that Mr. Madoff was a fraud, and that she received secret kickbacks from him in exchange for feeding him cash from other investors. It contends that she had a secret agreement with Mr. Madoff in which he paid her a flat fee — usually more than $6.5 million annually — to solicit investors for him. 
 
 “No Ponzi scheme can survive without a constant influx of fresh capital” and Ms. Kohn’s enterprise “provided a flood of cash for Madoff,” the trustee asserted in the complaint. 
 
 In 1994, Ms. Kohn formed Bank Medici, an Austrian bank that the trustee contends was nothing more than a conduit set up for the sole purpose of funneling money to Mr. Madoff through several feeder funds, including Harley International, the Herald Fund and the Primeo Funds. 
 
 Bank Medici was 25 percent owned by Bank Austria, and the trustee claims in his complaint that it was effectively a “de facto” branch of the country’s largest bank. The association with Bank Austria gave Ms. Kohn and Bank Medici an imprimatur of legitimacy when recruiting investors, the trustee asserted. 
 
 The complaint also claims that Mr. Madoff kept secret records of his dealings with Ms. Kohn, hiding them from other people at his firm and destroying them before his confession and arrest. Some former employees kept copies of the records, which listed the specific accounts that Mr. Madoff attributed to Ms. Kohn, it said. 
 
 According to the trustee, Ms. Kohn took great pains to distance herself and her family from the Ponzi scheme. Neither she nor her relatives ever established a direct account with Mr. Madoff, the complaint said. 
 
 As the Ponzi scheme neared collapse in the fall of 2008, the feeder funds controlled by Ms. Kohn began making large withdrawals from Mr. Madoff, the trustee said, including a single $423 million transfer just one month before federal agents arrested Mr. Madoff. 
 
 In the months before the fraud’s collapse, Ms. Kohn and her husband planned to move to Switzerland with stolen proceeds, the complaint said. 
 
 For some years, Ms. Kohn had spent a considerable amount of time in Switzerland, a common hunting ground for private bankers. But she was also able to penetrate successfully another close-knit milieu there, newly rich Russian oligarchs. After she went into hiding following Mr. Madoff’s fall, other bankers suggested it was because she feared retribution by her Russian clients. 
 
 The trustee’s complaint asserts that Ms. Kohn has not traveled to New York since Mr. Madoff’s arrest. Several members of her family, including her husband, her mother, a son, a daughter and two sons-in-law were also named as defendants in the lawsuit. According to the complaint, several of them invoked their Fifth Amendment rights more than 100 times during depositions with the trustee’s lawyers last year. 
 
 Nelson D. Schwartz contributed reporting. 
 
 Madoff Trustee’s Lawsuit Against Sonja Kohn
– The New York Mets' owners have avoided a trial over what they knew about Bernie Madoff's Ponzi scheme by settling today with the trustee for Madoff victims for $162 million, the New York Times reports. Trustee Irving Picard had sued Fred Wilpon and Saul Katz for $1 billion (later knocked down to $386 million), saying they disregarded warnings about Madoff's dealings; they claimed ignorance. Much of the $162 million will be balanced by money Katz and Wilpon will receive as "net losers" from the scheme themselves. Katz and Wilpon say they're due $178 million as Madoff victims; they'll get a percentage of whatever Picard can obtain from the beneficiaries of the scheme—money that will include the cash from their own settlement. So what does all this mean for the Mets? Wilpon and Katz probably wouldn't have settled had it put their team ownership at risk, ESPN notes. But the team is still tens of millions of dollars in debt to Bank of America and Major League Baseball, among others. The upshot: For Wilpon and Katz to maintain ownership of the team, they'll be counting on fans' attendance.