Pays The Price

Fred Wilpon was in a mood to celebrate when his phone rang at 4:40 p.m. on Dec. 11, 2008. The Mets owner was home early in Locust Valley, N.Y., on this Thursday afternoon and changing out of his suit and tie and into something more festive. In 20 minutes his oldest granddaughter, Kimberly, expected to learn online the result of her application to her first choice of colleges. Wilpon had scheduled a family celebration for that night in her honor at a Japanese restaurant in nearby Manhasset.

Life was extraordinarily rich for Wilpon, who had grown up in a four-family house in the Bensonhurst section of Brooklyn, the son of a funeral home manager. A real estate magnate renowned for his equanimity, loyalty and aficionado's love of baseball, Wilpon was so enriched that a few years earlier, he and his wife, Judy, had decided that they would not keep another dime of their fortune. Not only did they have enough money, but also the trust funds of their children and their children's children were so comfortably swollen that they would donate the rest of their estate in their lifetimes, rather than letting someone else parse it when they were gone.

"Did you hear?"

It was Emily O'Shea, his executive assistant for the past 35 years, on the phone. Her tone suggested bad news to a man accustomed to good news.

In just four months his Mets, coming off a season in which they drew a National League--leading four million fans, would open Citi Field, an $850 million wink to Ebbets Field, the beloved Brooklyn baseball chapel of Wilpon's youth. Earlier that day the club had swung a trade for reliever J.J. Putz, a $6 million setup man, to work in front of new closer Francisco Rodriguez, who had been signed for three years and $37 million just two days earlier. The Mets' payroll was headed to $149 million, a franchise record and the highest in the NL.

Also that same day Wilpon, through his Sterling Equities development company, which he cofounded in 1972 with his brother-in-law Saul Katz and which dealt mostly in commercial real estate, had stashed more money into Bernard L. Madoff Investment Securities LLC (BLMIS), in which at least 21 Wilpon family members and close business associates had held as many as 246 accounts, the first of which Wilpon opened in 1985.

The Sterling investors had $550 million in Madoff accounts. Or so they thought. In one phone call Wilpon learned it was gone. All of it. The Securities and Exchange Commission had just charged Madoff with securities fraud for operating history's largest Ponzi scheme—a business, Wilpon learned later, that Madoff had confessed to his sons, Mark and Andrew, the previous morning as being "all just one big lie."

"I just heard it on the news," O'Shea told Wilpon.

"Emily," Wilpon said softly. "This ... this can't be."

Bernie Madoff wasn't just an investment sage to Wilpon. He also was a trusted friend. They had known each other for almost 35 years, ever since their kids played together on the ballfields of Roslyn, N.Y. They invited one another to family weddings. On Florida vacations they went to the movies together and Madoff showed Wilpon his $2.2 million 55-foot vintage yacht, named Bull. Madoff had helped Fred and Judy celebrate their 50th anniversary two months earlier.