A family that invested in Bernard Madoff’s Ponzi scheme through multiple entities can recover some of its losses under insurance policies, a New York state appellate panel ruled Tuesday, but the recovery will be based on the difference between what each entity put into the scheme and what it got out, not the losses recorded in Madoff’s fraudulent statements.
At the same time, the Appellate Division, First Department, decision in Jacobson Family Investments v. National Union, 601325/10, held that the insurers can’t lump all of the entities’ losses together, which would result in no coverage, since the family as a whole emerged from the fraud a net winner.
