While thousands of investors are furious with Bernie Madoff, he did manage to make a few people very rich during the boom years. With handsome if fraudulent returns of 10% to 17%, investors who withdrew even a fraction of their principal may have ended up in the black. But as the New York Times reports, the authorities might now try to claw back those profits, making even Madoff winners into losers.
It's unclear how many people might have profited from Madoff's practices, which went on for years and entangled tens of thousands of clients who invested directly or via hedge funds. But in previous fraud cases, investors who profited unjustly have faced partial or total clawbacks, and New York State law may allow authorities to retrieve gains over the last six years. That law applies even if the client had no clue that the profits were fraudulent.