[Avodah] Returning Madoff's tainted money

[Saul Stokar]

Does anyone know of a halachic precedent that would require those who made
money by investing in Madoff's fund to return some or all of their
ill-gotten gains to those who lost money? After all, if you purchase a
stolen item (even unwittengly) from a thief (before ye'ush i.e. before the
owner abandons hope of getting it back) you have to return the item to its
owner. Clearly there are differences between a stolen object and an
investment with one of Madoff's funds (e.g. the investment was given to be
used (lehotza'a mitna) rather than as a deposit (pikadon)). None the less,
due to the pyramidal nature of the (alleged) fraud, the profits of the early
investors come directly from the pockets of the latecomers.

Saul Stokar
Raanana, Israel
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