Here's a somewhat similar case: https://www.reuters.com/article/idUK361678461020120229
The Becker brothers inherited their mother's estate, which included a Bernie Madoff investment account. They transferred the account away from Madoff in 2004 and closed the estate in Sept 2006. In Dec 2008 the Ponzi scheme was exposed. The Beckers were sued in Dec 2010 to recover the fictitious profits they unknowingly received from the estate that had been closed more than four years previously. They ended up settling with the trustee and returned the profits minus the fees and estate taxes that had been paid on them. (The Becker's situation was complicated because one brother was the general counsel to the SEC and he actually participated in the discussion about how to compensate the Madoff investors, so he ended up under investigation for conflict of interest, was grilled by Congress, etc.)
A judge had actually ruled in another case that the Madoff bankruptcy trustee couldn't go after fictitious profits that were received more than 2 years before the fraud was exposed, and that ruling was under appeal at the time of the settlement. The supreme court eventually declined to hear the final appeal, so the ruling stood, and the Beckers probably wouldn't have been forced to return the profits from their mother's account had they not already settled the earlier case.
As others have said, you definitely need to consult a lawyer, but if the recovery effort is coming from a bankruptcy trustee, you can at least ask your attorney about the Madoff case and whether the two year window could apply to you. Your attorney can also propose a smaller settlement and see what the trustee will accept.
The Becker brothers inherited their mother's estate, which included a Bernie Madoff investment account. They transferred the account away from Madoff in 2004 and closed the estate in Sept 2006. In Dec 2008 the Ponzi scheme was exposed. The Beckers were sued in Dec 2010 to recover the fictitious profits they unknowingly received from the estate that had been closed more than four years previously. They ended up settling with the trustee and returned the profits minus the fees and estate taxes that had been paid on them. (The Becker's situation was complicated because one brother was the general counsel to the SEC and he actually participated in the discussion about how to compensate the Madoff investors, so he ended up under investigation for conflict of interest, was grilled by Congress, etc.)
A judge had actually ruled in another case that the Madoff bankruptcy trustee couldn't go after fictitious profits that were received more than 2 years before the fraud was exposed, and that ruling was under appeal at the time of the settlement. The supreme court eventually declined to hear the final appeal, so the ruling stood, and the Beckers probably wouldn't have been forced to return the profits from their mother's account had they not already settled the earlier case.
As others have said, you definitely need to consult a lawyer, but if the recovery effort is coming from a bankruptcy trustee, you can at least ask your attorney about the Madoff case and whether the two year window could apply to you. Your attorney can also propose a smaller settlement and see what the trustee will accept.
