Mets Owner Fred Wilpon Involved in Ponzi Scheme

By JOSH ALPER

Updated 2:56 PM EST, Mon, Dec 15, 2008

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Mike Piazza was the rare good Fred Wilpon investment.

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When Bernard Madoff was arrested last Thursday, many jaws dropped at the breadth of his crimes. The former head of NASDAQ ran a Ponzi scheme of epic proportions, under the guise of a hedge fund, and bilked investors out of $50 billion. The investors weren't exactly rubes, either. Sen. Frank Lautenberg of New Jersey was one of them as were several large banks in Europe and, most notably for our purposes, New York Mets owner Fred Wilpon.

Wilpon's company, Sterling Equities, invested hundreds of millions of dollars with Madoff. That money isn't all Wilpon's, the company raises money of its own and invests it, but Major League Baseball was concerned enough that it spoke to Wilpon about the loss. They received assurances that there wouldn't be any impact on the day-to-day operations of the Mets as a result. In the short term, perhaps, but there's still reason to worry.

Wilpon will have to pay back his investors, lost money or not, and that will hurt his pocketbook. That will affect his ability to pay down debt on his buyout of Nelson Doubleday in 2002, according to the New York Times, and will affect his ability to weather whatever havoc the current economic climate wreaks on his revenues in the coming season. Adding to the trouble is the fact that Wilpon is only a few years removed from investing his money with another fraudster. Sam Israel also ran a "hedge fund," until his fraud was exposed and he faked his own death.

The Mets have a new park and their own cable channel, which should provide enough revenue to keep the team running even as Wilpon rushes from criminal to criminal in attempts to increase his fortune. If things get tight enough, however, he may need to sell off a portion of the team and that could impact the way the Mets are run.

That's for the future, though. At present, given Wilpon's history, Met fans should just be concerned about whether or not Francisco Rodriguez actually exists and isn't just some can't miss investment that Wilpon unearthed.