Madoff's fraud has been declared "a ponzi scheme". This reminds me of Ponzi scheme "12dailypro" that had collected $300 million in 1 year. When FBI shut it down, investors who had earned high profits earlier were receiving "Chargebacks" to their credit cards and Banks accounts. FBI was withdrawing money from "profitable investors" and giving it to "new investors" to minimize losses. Everything was in a Big mess. This had happened some 3 years back so now I am not sure what actually had happened.
The legal ruling on fraudulent conveyance was done in the Bayou hedge fund Ponzi scheme. "In a decision that could spell trouble for innocent hedge fund investors, a federal bankruptcy judge in New York ruled that investors in the now infamous Bayou Hedge Fundsâwhich were found to have operated a massive Ponzi schemeâqualified as creditors, and therefore could be subject to the fraudulent conveyance provisions of the Bankruptcy Code." http://www.mondaq.com/article.asp?articleid=59568
Good point; however if the party doesn't exist anymore, such as dissolved hedge fund, and people took the money and left its jurisdictions may have better luck. Cough offshore corpora accounts which help hiding its true owner. cough.
I also stick with my original position that the final court document in the Madoff fraud will be issued in 18 - 20 years. A 50 million dollar hedge fund fraud I invested in will issue the final disbursements from the receiver in mid-'09. The fraud was discovered in March, 2000. http://news.yahoo.com/s/ap/20090109/ap_on_bi_ge/madoff_false_profits