United States v. Bernard L. Madoff, et al.

1 
UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 
 
 
 
 
 
 
18 Civ. 9160 (VEC) 
 
 
 
 
STIPULATION AND ORDER OF SETTLEMENT AND DISMISSAL 
 
WHEREAS,  this  Stipulation  and  Order  of  Settlement and  Dismissal  (“Stipulation”)  is 
entered  into  by and  among plaintiff  the  United  States  of  America (the  “United  States”  or 
“Government”), by its attorney, Damian Williams, United States Attorney for the Southern District 
of  New  York,  the  relator  Cabot  Square  LLC  (“Cabot”),   whose  sole  members  are [Redacted] 
(collectively,  “Relators”),  by their  authorized representatives,  and  defendant  Fulcrum  Capital 
UNITED STATES OF AMERICA ex rel. CABOT SQUARE 
LLC, 
 
Plaintiff, 
 
v. 
 
FULCRUM CAPITAL HOLDINGS LLC, 
MATTHEW HAMILTON, TIMOTHY HORRIGAN, 
FONDACO SGR S.P.A., COMPAGNIA DI SAN 
PAOLO, and CARAC, 
                                     Defendants. 
UNITED STATES OF AMERICA, 
 
Plaintiff-Intervenor, 
 
                              v.  
 
  FULCRUM CAPITAL HOLDINGS LLC, 
 
Defendant. 

2 
Holdings  LLC  (“Fulcrum”  or  “Defendant,”  and  together  with  the  Government  and  Relator,  the 
“Parties”), by its authorized representatives; 
WHEREAS, Fulcrum is  a  Delaware limited liability corporation and investment firm with 
its  principal  place of  business  in  Austin, Texas.    Matthew  Hamilton  (“Hamilton”)  and  Timothy 
Horrigan (“Horrigan”) are cofounders and members of Fulcrum;
 
WHEREAS,  from  as  early  as  the  1970s  through December  2008, Bernard  L.  Madoff 
perpetrated  the  largest  Ponzi  scheme in  history, defrauding thousands  of  victims  of  billions  of 
dollars through Bernard L.  Madoff Investment Securities LLC (“Madoff Securities”) (the “Madoff 
Fraud”).    In  March  2009, Madoff  pleaded  guilty  to  eleven  federal  felony    counts, including 
securities,  mail,  and  wire  fraud,  and  in  June  2009, Madoff  was  sentenced  to  serve 150 years  in 
prison and forfeit over $170 billion; 
WHEREAS,  the  United  States  Attorney’s  Office  for the  Southern District of  New  York 
has  recovered  over  $9 billion  through civil  and  criminal asset  forfeitures  related  to  the  Madoff 
Fraud; 
WHEREAS, in 2013, the United States Department of Justice (“DOJ”), pursuant to DOJ 
remission regulations, 28 C.F.R §§ 9.1-9.9 (the “Regulations”), created the Madoff Victim Fund 
(the  “MVF”)  to  distribute  to  victims  of  the  Madoff  Fraud  certain  funds  forfeited  to  the  United 
States,  and  appointed Richard  Breeden  as  special  master  (the 
“Special  Master”)  to  oversee  the 
MVF and assist DOJ in connection with remission proceedings for victims of the Madoff Fraud; 
WHEREAS,  from  November  2013 through April  2014, the  MVF  received  remission 
petitions from tens of thousands of victims of the Madoff Fraud, and in November 2017, the MVF 
began making distributions to victims whose claims were approved.  To date, the MVF has made 

3 
eight distributions totaling over $4 billion, and has made payments to more than 42,000 approved 
claimants; 
WHEREAS, Luxalpha SICAV (“Luxalpha”), was a Luxembourg-based investment fund 
that operated as a Madoff Securities feeder fund, and its underlying investors suffered losses as a 
result  of  the  Madoff  Fraud.    Among  the  persons and  entities  who  were  beneficial  owners  of 
Luxalpha shares were:  Carac, a public pension fund based in Paris, France; a group of investors 
in  a  fund called  “Fondaco  Absolute  Return,” which  was  managed  by Fondaco SGR  S.p.A. 
(“Fondaco”),  an  institutional asset  management  company based  in  Torino, Italy  (the  “Fondaco 
Investors”), including Compagnia di San Paolo (“CSP”), a    foundation based in Torino, Italy;  and  
a group of individuals located in France, named Bruno Plancke, Michel Plancke, Olivier Plancke, 
Thierry Plancke, and Virginie Reant Plancke (the “Planckes”); 
WHEREAS,  in February,  March  and  April  2014, Carac, the  Fondaco Investors, and  the 
Planckes (the “Claimants”) each filed claims with the MVF seeking remission payments for losses 
they  claimed  to  have  incurred  as  a result  of their  investments  in  Madoff  Securities  through 
Luxalpha; 
WHEREAS, on or  about October 5, 2018, Relators   filed a complaint, under the qui tam 
provisions of the False Claims Act ( “FCA”), 31 U.S.C. §§ 3729 et seq., against Fulcrum, Hamilton, 
Horrigan, Fondaco, CSP, and Carac, alleging that they submitted, or caused to be submitted, false 
claims  to  the MVF  for remission  payments to  which  they  were  not entitled  (the  “Relator 
Complaint”); 
WHEREAS, the Government alleges that from at least October 2016 through October 2022 
(the “Covered Period”), Fulcrum violated the FCA by submitting, or causing to be submitted, false 
claims or statements to the MVF that fraudulently failed to disclose payments the Claimants had 

4 
received from Fulcrum for the sale of their Luxalpha shares and attendant rights, and/or claims for 
remission payments from the MVF to Fulcrum.  These payments were collateral recoveries that 
the Claimants were required to disclose to the MVF.  Pursuant to the Regulations, the MVF was 
required to reduce the Claimants’ remission payments by the amount of their collateral recoveries 
to prevent the Claimants from receiving duplicative recoveries.  As a    result of the false claims or 
statements Fulcrum submitted, or caused to be submitted, to the MVF, the MVF made remission 
payments to  the  C
laimants  that  they  were  not entitled  to  receive.    Many  of  the Claimants  then 
transferred  the  amounts they  had  unlawfully received  from  the MVF  to  Fulcrum.    The  conduct 
described in this Paragraph is  the “Covered Conduct” for purposes of this Stipulation; 
WHEREAS, on or about September 13, 2023, the Government filed a Notice of Election 
to Partially Intervene and on or about September 22, 2023, the Government filed a Complaint-In-
Intervention in  the  above-referenced qui  tam  action  (the “Government Complaint”),  in  which  it 
asserts claims against Defendant Fulcrum under the FCA for the Covered Conduct; 
WHEREAS,  the Parties  have,  through this  Stipulation,  reached  a  mutually  agreeable 
resolution addressing the claims asserted against Defendant Fulcrum in the Government Complaint 
and the Relator Complaint, for the Covered Conduct; 
NOW, THEREFORE, upon the Parties’ agreement IT IS HEREBY ORDERED that: 
TERMS AND CONDITIONS 
1. The Parties agree that this Court has subject matter jurisdiction over this action and 
consent to this Court’s exercise of personal jurisdiction over each of them. 
2. Defendant  admits,  acknowledges, and  accepts  responsibility  for  the  following 
conduct (the “Admitted Conduct”) that occurred during the Covered Period: 
 

5 
a. Fulcrum is an investment firm that specializes in, among other things, 
trading distressed  assets.    In  particular,  during  the Covered  Period,  
Fulcrum engaged in the purchase and sale of Madoff feeder fund shares 
and attendant rights. 
 
b. In February, March and April of 2014, Carac, the Fondaco Investors, 
and  the Planckes  filed  claims  with  the MVF  seeking  remission 
payments for losses from  their  investments  in  Madoff Securities 
through Luxalpha.  
 
c. Fulcrum  subsequently purchased  the Claimants’  Luxalpha shares.  
Specifically,  Fulcrum purchased  Fondaco’s  Luxalpha shares  in  July 
2014, Carac’s  Luxalpha shares  in  October  2014, and  the Planckes’ 
Luxalpha shares  in  January  2019.    Fulcrum immediately  resold  the 
Fondaco and  Carac shares  to  third  parties,  but retained  rights to 
Claimants’ MVF remission payments, as described below. 
 
d. Specifically,  Fulcrum entered  into  Purchase and  Sale Agreements 
(“PSAs”)  with  Carac,  CSP,  and  the Planckes  pursuant to  which 
Fulcrum   purported to   acquire   their   rights to   receive remission 
payments from  the MVF.    Under  the PSAs,  Carac,  CSP,  and  the 
Planckes  agreed  that  they  would retain  no beneficial  interest  in  any 
distributions they  received  from  the MVF,  that  they  would  hold any 
such  distributions as  agents  of  Fulcrum, and  that  they  would deliver 
any such distributions to Fulcrum within five days of receipt.  Carac, 
CSP,  and  the Planckes  further agreed  to  grant  Fulcrum irrevocable 
power of  attorney with  respect to the remission claims and authorize 
Fulcrum to act in each of their names, places, and steads with respect 
to such claims.  Finally, Carac, CSP, and the Planckes agreed to deliver 
all    correspondence they received from the MVF to Fulcrum and take 
all    actions requested by Fulcrum to effectuate the terms of the PSAs.   
 
e. Fulcrum knew that DOJ issued a    Plan of Distribution for the MVF (the 
“Plan”)  in  the form  of answers  to  frequently  asked  questions, which 
has  been  published  on  the MVF  website  since November  2013.  
Fulcrum knew that the MVF Remission process was governed by the 
Regulations and the Plan.  In particular, Fulcrum knew that: 
 
(1) To  be eligible  to  participate  in  payments from  the MVF,  a 
person must be a “victim” under the Regulations, meaning that 
the   person   lost their   own   money as   a direct   result   of 
investments that were rendered worthless by the Madoff fraud. 
 
(2) No victim is eligible to recover more than his or her actual “net 
loss” on a cash-in, cash-out basis. This means that the starting 
point in  measuring  victim  loss is  all     the cash  the victim 

6 
invested   in   Madoff Securities,   less   the   amount   of any 
withdrawals.     
 
(3) Pursuant to  the  Regulations, DOJ  requires  that  all  “collateral 
recoveries”   the victim has   already   received,   or that   are 
“reasonably  available”  must  be considered  in  determining 
eligibility for remission and requires that remission payments 
be reduced by the victim’s “collateral recoveries.”      
 
(4) In  the  case  of  the MVF,  collateral  recoveries  include any 
payments victims  receive,  directly  or indirectly,  from  the 
Securities Investor Protection Corporation, Madoff bankruptcy 
distributions, insurance or class action recoveries, or any other 
source for the victims’ Madoff losses.  
 
(5) Victims making claims to MVF are  required to certify to the 
completeness  and  the accuracy  of their  recovery  disclosures, 
as of the date such disclosures are made.   
 
f. Furthermore, Fulcrum knew that from 2016 to 2022, the MVF issued 
multiple Collateral Recovery Update (“CRU”) Notices to each of the 
Claimants.  As  indicated  in  the respective CRU  Notices,  updated 
recovery   disclosures were required   in   advance   of each   MVF 
distribution, in  order to  permit  the MVF  to  compute  the accurate 
amount  of  the remission  payment for each  eligible  claimant  in  each 
MVF  distribution.    Thus,  the CRU  Notices  required  Claimants  to 
disclose any recoveries they received from any source other than the 
MVF,  including  proceeds received  from  the sale  or  assignment  of 
Madoff feeder fund shares and rights, and from the purported sale or 
assignment of MVF remission claims. 
 
g. Fulcrum also  knew  that  the MVF  periodically  p  osted  notices  on its 
website  reminding victims  of  the requirement  to  disclose collateral 
recoveries  to  the MVF  and  further  explaining what  constitutes  a 
collateral recovery.  In particular,  Fulcrum knew that a notice posted 
on  the MVF  website  from  August  through December  2017 stated: 
“MVF  previously sent  you  a collateral  recovery  update request 
explaining that: ‘Collateral recoveries include bankruptcy 
distributions, litigation   recoveries,   settlement proceeds,   insurance 
recoveries,  or any  other  compensation received  for  your  Madoff 
losses.’  Essentially,  anything you received from  anyone due to your 
Madoff loss is a collateral recovery.  In particular, you need to report 
to  MVF  all     payouts from  the  Madoff  bankruptcy, as  well  as  any 
proceeds  you received  as  a result  of the  sale or  assignment  of  your 
claim in either the bankruptcy or MVF proceedings.”  
 

7 
h. Despite  the stated  requirement  that  victims  disclose all     collateral 
recoveries they received, including proceeds from the sale of Madoff 
claims,  Fulcrum  instructed,  or  otherwise caused  the Claimants  to 
submit inaccurate CRU  responses to  the MVF  that  failed  fully  to 
disclose  the  amounts the  Claimants  had  received  from  selling  their 
Luxalpha shares and related rights, and remission claims to Fulcrum.  
In particular: 
 
(1) In  September  2017 and  May  2019, respectively,  pursuant to 
the PSA and at  Fulcrum’s behest, Carac submitted two CRU 
responses to the MVF that inaccurately represented that Carac 
had  received  no collateral  recoveries,  when, in  fact,  it had 
received significant sales proceeds from Fulcrum. 
 
(2) From February 2017 through July 2019, pursuant to the PSA 
and at Fulcrum’s behest, CSP submitted four CRU responses 
to the MVF that inaccurately failed to disclose the full amount 
that  CSP  had  received  from  Fulcrum for its  Luxalpha shares 
and  related  rights. CSP  stated  that  it    had  sold its   remission 
claim   to   an   unidentified secondary   market   player   for   a 
specified  amount,  but this  amount reflected  only  the  amount 
CSP  received  from  Fulcrum for  the  purported  sale  of its 
remission  rights rather  than  the total  proceeds CSP  had 
received from Fulcrum for the sale of its Luxalpha shares and 
related rights.  During the same time period, the other Fondaco 
Investors likewise  submitted  28  documents to  the MVF  that 
inaccurately  represented  that  these  investors had  received  no 
collateral   recoveries,   when, in   fact,   they   had   received 
significant sales proceeds from Fulcrum.  
 
(3) From August 2019 through October 2020, pursuant to the PSA, 
and at Fulcrum’s behest, the Planckes submitted twenty CRU 
responses to  the MVF  that  inaccurately  represented  that  the 
Planckes had received no collateral recoveries other than those 
they received from a    financial intermediary in connection with 
a litigation   settlement,   when   in   fact   they   had   received 
significant  additional proceeds  from  Fulcrum for  the sale of 
their Luxalpha shares and related rights. 
 
i. As a    result of Fulcrum instructing or otherwise causing the Claimants 
to  submit inaccurate collateral  recovery  information  as  described 
above, the MVF distributed remission payments to the Claimants that 
they  were  not entitled  to  receive.    Pursuant to  the PSA,  Carac,  CSP, 
and  the Planckes  then  transferred  the  amounts they  had  improperly 
received from the MVF to Fulcrum. 
 

8 
3. Defendant shall pay to the Government within fourteen (14) business days of the 
Effective Date (defined below in Paragraph 27) the sum of $2,511,084 plus interest which 
shall be compounded annually at a rate of 5.21% accruing from June 16, 2023, to the date 
of the payment (the “Settlement Amount”) in accordance with instructions to be provided 
by the  Financial  Litigation  Unit  of  the  United  States  Attorney’s  Office  for the  Southern 
District of  New York.    Of  the  Settlement Amount, $837,028 plus  applicable interest 
constitutes restitution to the United States.  
4. Defendant  agrees  that  Fulcrum  and  the  Claimants  are not  entitled  to  receive any 
amounts from the MVF in the future, and that Fulcrum shall not seek to obtain, on behalf 
of itself or the Claimants, any amounts from the MVF.  
5. Defendant  agrees  to  cooperate fully  and  truthfully  with  the  United  States’ 
investigation of individuals and entities not released in this Stipulation.  Upon reasonable 
notice, Defendant shall encourage, and agree not to impair, the cooperation of its directors, 
officers, and employees, and shall use its best efforts to make available, and encourage, the 
cooperation of  former directors,  officers,  and  employees  for interviews  and  testimony, 
consistent with the rights and privileges of such individuals.  Defendant further agrees to 
furnish  to  the  United  States,  upon request,  complete and  unredacted  copies  of  all     non-
privileged documents, reports,  memoranda  of  interviews,  and  records  in  its  possession, 
custody, or  control  concerning any  investigation  of  the  Covered  Conduct  that  it  has 
undertaken, or that has been performed by another on its behalf. 
6. Subject to the exceptions in Paragraph 10 (concerning reserved claims) below and 
subject  to  Paragraph  11 (concerning default)  and  Paragraph  15 (concerning bankruptcy 
proceedings) below, and conditioned on Defendant’s full compliance with the terms of this 

9 
Stipulation, including full payment of the Settlement Amount to the United States pursuant 
to Paragraph 3   above, the United States releases Defendant, including its subsidiaries and 
corporate predecessors, successors and assigns, from any civil or administrative monetary 
claim  that  the  United  States  has  for the  Covered  Conduct  under  the  FCA,  the  Civil 
Monetary Penalties Law, 42 U.S.C. §   1320a-7a, the Program Fraud Civil Remedies Act, 
31 U.S.C. § 3801-3812, and the common law theories of fraud, payment by mistake, and 
unjust enrichment.  For avoidance of doubt, this Stipulation does not release any current or 
former officer, director, employee, or agent of Defendant from liability of any kind. 
7. Defendant  fully  and  finally  releases  the  United  States,  its  agencies,  officers, 
employees, servants, and agents, including the MVF, the Special Master, and all    entities 
involved in the administration of the MVF and their employees, from any claims (including 
attorneys’  fees,  costs,  and  expenses  of  every  kind and  however  denominated)  that 
Defendant has asserted, could have asserted, or may assert in the future against the United 
States, its agencies, officers, employees, servants, or agents related to the Covered Conduct 
or the United States’ investigation, prosecution and settlement thereof.   
8. Conditioned on Defendant’s  full  compliance  with  the  terms  of  this  Stipulation, 
including full  payment  of  the  Settlement Amount  to  the  United  States  pursuant  to 
Paragraph 3   above, Cabot releases from any and all manner of claims, proceedings, liens, 
and causes of action of any kind or description that Cabot has against Defendant from the 
beginning of  time  through the  date of  this  Stipulation  relating  to  the  Admitted  Conduct.  
Cabot agrees to file, within 10 days of this Stipulation, an additional stipulation of dismissal 
as to Matthew Hamilton and Timothy Horrigan. 

10 
9. In consideration of the execution of this Stipulation by Relators and the Relators’ 
release as   set   forth   in   Paragraph   8 above, Defendant,   including its   subsidiaries, 
predecessors, and corporate successors and assigns, as well as all of its current and former 
officers, directors, employees, attorneys, and other agents, release Relators and their heirs, 
successors, attorneys, agents, and assigns, from any and all    manner of claims, proceedings, 
liens, and causes of action of any kind or description that Defendant has against Relators 
related to or arising from the Relator Complaint.   
10. Notwithstanding the release given in Paragraph 6 above, or any other term of this 
Stipulation, the following claims of the Government are specifically reserved and are not 
released by this Stipulation: 
a. any   liability   arising   under   Title   26, United   States   Code   (Internal 
Revenue Code); 
b. any criminal liability; 
c. except as explicitly stated in this Stipulation, any administrative liability or 
enforcement  right, including the  suspension or  debarment  rights  of  any 
federal agency; 
d. any liability to the United States (or its agencies) for any conduct other than 
the Covered Conduct; 
e. any liability based upon obligations created by this Stipulation; and 
f. any liability of individuals. 
11. Defendant  shall  be  in  default  of  this  Stipulation  if  Defendant  fails  to  make the 
required payment set forth in Paragraph 3   above on or before the due date for such payment, 
or  if  Defendant  fails  to  comply materially  with  any  other  term  of  this  Stipulation  that 

11 
applies to Defendant (“Default”).  The Government will provide a written Notice of Default 
to  Defendant  of  any  Default  in  the  manner  set  forth  in  Paragraph  27 below.    Defendant 
shall then have an opportunity to cure the Default within seven (7) calendar days from the 
date of  receipt  of  the  Notice  of  Default  by making  the  payment  due  and  paying any 
additional interest accruing under the Stipulation up to the date of payment.   If Defendant 
fails to cure the Default within thirty (30) calendar days of receiving the Notice of Default 
(“Uncured Default”), interest on the remaining unpaid balance shall thereafter accrue at the 
rate of  12%  per  annum,  compounded daily  from  the  date of  Default,  on the  remaining 
unpaid total (principal and interest balance).  In the event of an Uncured Default, Defendant 
shall  agree to  the  entry  of  a  consent  judgment  in  favor  of  the  United  States  against 
Defendant  in  the  amount  of  the  Settlement Amount  as  attached  hereto  as  Exhibit  A.   
Defendant  also  agrees  that  the  United  States,  at  its  sole  discretion, may  (i) retain  any 
payments  previously made,  rescind  this  Stipulation, and  reinstate  the  claims  asserted 
against Defendant in the Government Complaint, or bring any
 civil and/or administrative 
claim,  action,  or  proceeding against  Defendant  for the  claims  that  would otherwise  be 
covered by the release provided in Paragraph 6   above, with any recovery reduced by the 
amount  of  any  payments  previously made by Defendant to  the  United  States  under  this 
Stipulation; (ii) take any action to enforce this Stipulation in a new action or by reinstating 
the  Government  Complaint; (iii)  offset  the  remaining  unpaid balance  from  any  amounts 
due  and  owing to  Defendant  and/or  affiliated  companies  by any  department,  agency,  or 
agent of the United States at  the time of Default or subsequently; and/or (iv)  exercise any 
other  right  granted  by law,  or  under  the  terms  of  this  Stipulation,  or  recognizable at 
common law or in equity.  The United States shall be entitled to any other rights granted 

12 
by law  or  in  equity by reason  of  Default,  including referral  of  this  matter  for private 
collection.   In  the  event  the  United  States  pursues  a  collection  action, Defendant  agrees 
immediately to pay the United States the greater of (i) a ten-percent (10%) surcharge of the 
amount collected, as allowed by 28 U.S.C. §   3011(a), or (ii) the United States’ reasonable 
attorneys’ fees and expenses incurred in such an action.  In the event that the United States 
opts  to  rescind  this  Stipulation  pursuant  to  this  paragraph,  Defendant  waives  and  agrees 
not to plead, argue, or otherwise raise any defenses of statute of limitations, laches, estoppel 
or  similar  theories,  to  any civil or  administrative  claims  that  (i) are filed  by the  United 
States against Defendant within 120 days of written notification that this Stipulation has 
been rescinded, and (ii) relate to the Covered Conduct, except to the extent these defenses 
were available on October 5,    2018.  Defendant agrees not to contest any offset, recoupment, 
and/or collection action undertaken by the United States pursuant to this paragraph, either 
administratively or in any state or federal court, except on the grounds of actual payment 
to the United States. 
12. Defendant  having truthfully admitted  to  the  Admitted  Conduct  set  forth  in 
Paragraph 2   hereof, agrees it   shall not, through its attorneys, agents, officers, or employees, 
make any public statement, including but not limited   to, any statement in a press release, 
social  media  forum,  or  website,  that  contradicts  or  is  inconsistent  with  the  Admitted 
Conduct  or  suggests  that  the  Admitted  Conduct  is  not  wrongful  (a  “Contradictory 
Statement”).  Any Contradictory Statement by Defendant or its attorneys, agents, officers, 
or  employees,  shall  constitute  a  violation  of  this  Stipulation,  thereby  authorizing the 
Government to pursue any of the remedies set forth in Paragraph 11 hereof, or seek other 
appropriate  relief  from  the  Court.    Before  pursuing any  remedy,  the  Government  shall 

13 
notify Defendant  that  it  has  determined  that  Defendant  has  made a  Contradictory 
Statement.  Upon receiving notice from the Government, Defendant may cure the violation 
by repudiating the  Contradictory Statement  in  a  press  release or  other  public  statement 
within four business days.   If    Defendant learns of a potential Contradictory Statement by 
its attorneys, agents, officers, or employees, Defendant must notify the Government of the 
statement  within  24 hours.    The  decision as  to  whether  any  statement  constitutes  a 
Contradictory Statement  or  will be  imputed  to  Defendant  for the  purpose  of  this 
Stipulation, or whether Defendant adequately repudiated a Contradictory Statement to cure 
a  violation  of  this  Stipulation,   shall  be  within  the  sole  discretion  of  the  Government.  
Consistent  with  this  provision, Defendant  may  raise defenses  and/or  assert  affirmative 
claims or defenses in any proceeding brought by private and/or public parties, so long as 
doing so would not contradict or be inconsistent with the Admitted Conduct. 
13. Relators and their heirs, successors, attorneys, agents, and assigns shall not object 
to this Stipulation; Relators agree and  confirm that the terms of this Stipulation are fair, 
adequate,   and   reasonable   under   all      the   circumstances,   pursuant   to   31 U.S.C. 
§ 3730(c)(2)(B). 
14. Defendant waives and shall not assert any defenses that it   may have to any criminal 
prosecution or administrative action relating to the Covered Conduct that may be based in 
whole  or  in  part  on a  contention that,  under  the  Double  Jeopardy Clause in  the  Fifth 
Amendment  of  the  Constitution,  or  under  the  Excessive Fines  Clause  in  the  Eighth 
Amendment  of  the  Constitution, this  Stipulation  bars  a  remedy  sought  in  such  criminal 
prosecution or administrative action.  

14 
15. In  exchange for  valuable  consideration provided in  this  Stipulation, Defendant 
acknowledges the following:  
a. Defendant has reviewed its  financial situation and warrants that it   is solvent 
within the meaning of 11 U.S.C. §§ 547(b)(3) and 548(a)(1)(B)(ii)(I) and 
shall  remain  solvent  following  payment  to  the  United  States  of  the 
Settlement Amount.   
b. In evaluating whether to execute this Agreement, the Parties intend that the 
mutual  promises, covenants, and  obligations  set  forth  herein  constitute  a 
contemporaneous  exchange for new  value given to  Defendant,  within  the 
meaning  of  11 U.S.C. §    547(c)(1),  and  the  Parties  conclude  that  these 
mutual  promises, covenants, and  obligations  do, in  fact,  constitute  such  a 
contemporaneous exchange.   
c. The  mutual  promises,  covenants, and  obligations  set  forth  herein  are 
intended by the Parties to, and do in fact, constitute a reasonably equivalent 
exchange of value. 
d. The Parties do not intend to hinder, delay, or defraud any entity to which 
Defendant was  or  became  indebted on or  after  the  date of  any  transfer 
contemplated   in   this   Stipulation,   within   the   meaning   of   11 U.S.C. 
§ 548(a)(1). 
e. If    Defendant’s obligations under this Stipulation are avoided for any reason 
(including but not limited to through the exercise of a trustee’s avoidance 
powers under the Bankruptcy Code) or if,  before the Settlement Amount is  
paid in full, Defendant or a third party commences a case, proceeding, or 

15 
other    action    under    any law    relating    to    bankruptcy, insolvency, 
reorganization, or relief of debtors seeking any order for relief of Defendant; 
debts, or  to  adjudicate  Defendant  as  bankrupt  or  insolvent, or  seeking 
appointment  of  a  receiver,  trustee,  custodian, or  other  similar  official  for 
Defendant or for all    or any substantial part of Defendant’s assets:  
(1) the United States may rescind the releases in this Stipulation and bring any 
civil and/or administrative claim, action, or proceeding against Defendant 
for the claims that would otherwise be covered by the release provided in 
Paragraph 6 above.  
(2) the United States has an undisputed, noncontingent, and liquidated allowed 
claim  against  Defendant  in  the  amount  of  $2,511,048, less  any  payments 
received pursuant to the Stipulation, provided, however, that such payments 
are not  otherwise  avoided and  recovered  from  the  United  States  by 
Defendant,  a  receiver,  trustee,  custodian, or  other  similar  official  for 
Defendant; and   
(3) if any payments are avoided and recovered by Defendant, a receiver, trustee, 
custodian, or  similar  official  for Defendant, Relators  shall,  within  thirty 
days of written notice from the United States to the undersigned Relators’ 
counsel, return any portions of such payments already paid by the United 
States to Relator. 
f. Defendant  agrees  that  any  civil and/or  administrative  claim,  action,  or 
proceeding brought by the United States under Paragraph 15(e) above is not 
subject  to  an  “automatic  stay” pursuant  to  11 U.S.C.  §   362(a)  because  it 

16 
would  be an  exercise of  the United  States’  police and  regulatory power.  
Defendant  shall  not argue  or  otherwise  contend that  the United  States’ 
claim, action, or proceeding is subject to an automatic stay and, to the extent 
necessary,  consents to  relief  from  the automatic  stay  for cause  under  11 
U.S.C.  §  362(d)(1).    Defendant  waives  and  shall  not plead,  argue,  or 
otherwise raise any  defenses  under  the theories  of statute  of limitations, 
laches,  estoppel,  or similar  theories,  to  any  such  civil  or administrative 
claim, action, or proceeding brought by the United States within 120 days 
of written  notification  to  Defendant  that  the  release has  been  rescinded 
pursuant to this paragraph, except to the extent such defenses were available 
on October 5, 2018.   Defendant agrees to the following: 
g. Unallowable Costs Defined:  All costs (as defined in the Federal Acquisition 
Regulation, 48 C.F.R. § 31.205-47) incurred by or on behalf of Defendant 
and its present or former officers, directors, employees, shareholders, and 
agents in connection with: 
(1) the matters covered by this Stipulation; 
(2) the United States’ audit(s) and civil and any criminal investigation(s) of the 
matters covered by this Stipulation; 
(3) Defendant’s  investigation,  defense,  and  corrective  actions undertaken  in 
response to   the United   States’   audit(s) and   civil and   any   criminal 
investigation(s) in connection with the matters covered by this Stipulation 
(including attorney’s fees); 
(4) the negotiation and performance of this Stipulation; 

17 
(5) the  payment Defendant  makes  to  the  United  States  pursuant to  this 
Agreement  and  any  payments that  Defendant  may  make to  Relators, 
including costs and attorneys’ fees, 
are unallowable costs for government contracting purposes (hereinafter referred to 
as Unallowable Costs). 
h. Future Treatment  of  Unallowable  Costs:    Unallowable  Costs will  be 
separately  determined  and  accounted  for  by  Defendant, and  Defendant  shall  not charge 
such Unallowable Costs directly or indirectly to any contract with the United States. 
i. T
reatment   of   Unallowable   Costs   Previously Submitted   for Payment:  
Within 90 days of the Effective Date of this Stipulation, Defendant shall identify and repay 
by adjustment to future claims for payment or otherwise any Unallowable Costs included 
in payments previously sought by Defendant or any of its subsidiaries or affiliates from 
the United States.  Defendant agrees that the United States, at a   minimum, shall be entitled 
to  recoup  from  Defendant any  overpayment  plus applicable  interest  and  penalties  as  a 
result  of  the  inclusion  of such  Unallowable  Costs  on  previously submitted  requests  for 
payment.    The  United  States,  including  the Department  of Justice  and/or  the affected 
agencies,  reserves  its  rights to  audit, examine,  or re-examine Defendant’s  books and 
records  and  to  disagree  with  any  calculations  submitted  by Defendant  or any  of its 
subsidiaries   or affiliates   regarding any   Unallowable   Costs   included in   payments 
previously  sought  by Defendant,  or  the effect  of  any  such  Unallowable  Costs  on  the 
amount of such payments. 

18 
16. This Stipulation is intended to be for the benefit of the Parties only.  The Parties do 
not  release any  claims  against  any  other  person or  entity  except  as  otherwise  provided 
herein.  
17. Each Party shall bear its own legal and other costs incurred in connection with this 
matter, including the preparation and performance of this Stipulation; provided, however, 
nothing in this Stipulation shall preclude Relators from seeking to recover their expenses 
or attorneys’ fees and costs from Defendant, pursuant to 31 U.S.C. § 3730(d).   
18. Any failure by the Government to insist upon the full or material performance of 
any  of  the  provisions  of  this  Stipulation  shall  not  be  deemed  a  waiver  of  any  of  the 
provisions hereof, and the Government, notwithstanding that failure, shall have the right 
thereafter to insist upon the full or material performance of any and all    of the provisions of 
this Stipulation. 
19. This  Stipulation  is  governed by  the  laws  of  the  United  States.    The  exclusive 
jurisdiction  and  venue  for  any  dispute  relating  to  this  Stipulation  is  the  United  States 
District Court for the Southern District of New York.   
20. For purposes of construing this Stipulation, this Stipulation shall be deemed to have 
been drafted by all    Parties to this Stipulation and shall not, therefore, be construed against 
any Party for that reason in any subsequent dispute. 
21. This  Stipulation  constitutes  the  complete  agreement  between  the  Parties  with 
respect to the subject matter hereof.  This Stipulation may not be amended except by written 
consent  of  the  Parties.    No  prior  agreements,  oral  representations  or  statements  shall  be 
considered part of this Stipulation. 

19 
22. The undersigned counsel and other signatories represent and warrant that they are 
fully  authorized  to  execute this  Stipulation  on  behalf  of  the  persons  and the  entities 
indicated below. 
23. This  Stipulation  is  binding on Defendant’s  successors,  transferees,  heirs,  and 
assigns. 
24. This Stipulation is  binding on Relators’ successors, transferees, heirs, and assigns.  
25. This  Stipulation  may  be  executed  in  counterparts, each  of  which  constitutes  an 
original  and  all     of  which  constitute  one  and  the  same Stipulation.    E-mails  that  attach 
signatures  in  PDF  form  or  facsimiles  of  signatures  shall  constitute  acceptable,  binding 
signatures for purposes of this Stipulation. 
26. Any  notice  pursuant  to  this  Stipulation  shall  be  in  writing and  shall,  unless 
expressly  provided otherwise  herein,  be  delivered  by hand, express  courier,  or  e-mail 
transmission followed by postage-prepaid mail, and shall be addressed as follows: 
 
TO THE UNITED STATES: 
Pierre G. Armand 
Assistant United States Attorney 
United States Attorney’s Office 
Southern District of New York 
86 Chambers Street, Third Floor 
New York, New York 10007 
Email: [email protected] 
 
 
 
 
 
 
 

20 
TO DEFENDANT: 
 
Jonathan M. Phillips 
Gibson, Dunn & Crutcher LLP 
1050 Connecticut Avenue, N.W. 
Washington, DC 20036-5306 
 Email: [email protected] 
 
TO RELATORS: 
 
 Matthew L. Schwartz 
 Boies Schiller F lexner LLP 
 55 Hudson Yards, 20th Floor 
 New York, New York 10001 
 Email: [email protected] 
 
27. The  effective date of  this  Stipulation  is  the  date upon which  the  Stipulation  is 
approved by the Court (the “Effective Date”). 
  







24 
SO ORDERED: 
 
 
       
HON.  VALERIE E. CAPRONI 
UNITED STATES DISTRICT JUDGE 
 
 
Dated:                   , 2023 

UNITED STATES DISTRICT COURT      
SOUTHERN DISTRICT OF NEW YORK 
 
 
 
 
 
 
 
18 Civ. 9160 (VEC) 
 
 
 
  
JUDGMENT 
 
Upon the consent of plaintiff the United States of America and defendant Fulcrum Capital 
Holdings LLC (“Fulcrum”), it is hereby 
ORDERED, ADJUDGED and DECREED: that plaintiff the United States of America is  
awarded judgment in the amount of $2,511,084 against Fulcrum as well as post-judgment interest 
at the rate of 12% per annum compounded daily.  
 
 
 
 
 
UNITED STATES OF AMERICA ex rel. CABOT SQUARE 
LLC, 
 
Plaintiff, 
 
v. 
 
FULCRUM CAPITAL HOLDINGS LLC, 
MATTHEW HAMILTON, TIMOTHY HORRIGAN, 
FONDACO SGR S.P.A., COMPAGNIA DI SAN 
PAOLO, and CARAC, 
                                     Defendants. 
UNITED STATES OF AMERICA, 
 
Plaintiff-Intervenor, 
 
                              v.  
 
  FULCRUM CAPITAL HOLDINGS LLC, 
 
Defendant. 

Dated:  New York, New York 
 _____________, 2023 
 
DAMIAN WILLIAMS 
United States Attorney for the 
Southern District of New York 
 
 
 
By:       
Pierre G. Armand 
Assistant United States Attorney 
86 Chambers Street, Third Floor 
New York, New York 10007 
Tel.: (212) 637-2724 
Email: [email protected] 
Attorney for the United States of America 
 
 
Dated:   Austin, Texas 
                    , 2023 
 
By:       
Matthew Hamilton 
Member 
Fulcrum Capital Holdings LLC 
 
 
 
Dated:   Washington, DC 
                     , 2023 
Gibson, Dunn & Crutcher LLP  
   
 
By:       
      Jonathan M. Phillips 
      Gibson, Dunn & Crutcher LLP 
      1050 Connecticut Avenue, N.W. 
      Washington, DC 20036-5306 
      Tel.:  (202) 887-3546  
       Email:  [email protected] 
 
Attorneys    for    Defendant    Fulcrum    Capital 
Holdings LLC 
 
 

 
SO ORDERED: 
 
       
HON.  VALERIE E. CAPRONI 
  UNITED STATES DISTRICT JUDGE 
 
 
Dated:                   , 2023 

DAMIAN WILLIAMS  
United States Attorney 
Southern District of New York 
By:  PIERRE G. ARMAND 
Assistant United States Attorney 
86 Chambers Street, 3rd Floor 
New York, New York 10007 
Telephone: (212) 637-2724 
Email: [email protected]  
 
UNITED STATES DISTRICT COURT  
SOUTHERN DISTRICT OF NEW YORK 

 
 
 
 
 
 

18 Civ. 9160 (VEC) 
 
 
 
COMPLAINT-IN-
INTERVENTION OF THE 
UNITED STATES OF 
AMERICA 
 
 
JURY TRIAL DEMANDED 

 

 
 

The United States of America, by its attorney, Damian Williams, United States 

Attorney for the Southern District of New York, alleges for its complaint-in-intervention as 

follows: 

UNITED STATES OF AMERICA ex rel. CABOT SQUARE 
LLC, 
 

Plaintiff, 
 

v. 
 
FULCRUM CAPITAL HOLDINGS LLC, MATTHEW 
HAMILTON, TIMOTHY HORRIGAN, FONDACO 
SGR S.P.A., COMPAGNIA DI SAN PAOLO, and 
CARAC, 

                                     Defendants. 

UNITED STATES OF AMERICA, 
 

Plaintiff-Intervenor, 
 
                              v. 
 
FULCRUM CAPITAL HOLDINGS LLC, 

 
 Defendant. 



 

2 

PRELIMINARY STATEMENT 

1. This is a civil fraud action brought by plaintiff-intervenor the United States of 

America (the “United States” or the “Government”) against defendant Fulcrum Capital 

Holdings LLC (“Fulcrum” or “Defendant”), an investment firm based in Austin, Texas, to 

recover damages and civil penalties arising from Fulcrum’s violations of the False Claims 

Act (the “FCA”), 31 U.S.C. § 3729 et seq., in connection with fraudulently obtaining 

remission payments from the Madoff Victim Fund (the “MVF”). 

2. The MVF was created by the United States Department of Justice (“DOJ” or the 

“Department”) to compensate victims of the massive Ponzi scheme perpetrated by Bernard 

L. Madoff through a process called remission.  The United States Attorney’s Office for the 

Southern District of New York (the “SDNY”) has provided funds to the MVF through civil 

and criminal asset forfeiture recoveries for pro rata distribution to Madoff fraud victims.  

To ensure equitable distribution of MVF funds, all claimants are required to disclose to the 

MVF any Madoff-related collateral recoveries they have obtained, meaning any monies 

received from sources other than the MVF, such as insurance, private lawsuits or 

settlements, the court-supervised liquidation of Madoff’s firm, or proceeds from selling 

their Madoff-related investments and/or recovery rights to another party.  To prevent MVF 

claimants from receiving duplicative recoveries, the MVF is required to reduce remission 

payments paid to claimants by the amount of any collateral recoveries they received. 

3. Fulcrum purchased from multiple third parties who had submitted remission claims 

to the MVF their shares in Madoff feeder funds,  as well as the claimants’ rights to receive 

remission payments from the MVF.  Because claims for remission cannot legally be 

assigned, these victims outwardly retained their status as MVF claimants, but privately 

agreed to promptly pass on any distributions they received from the MVF to Fulcrum. 



 

3 

4. When the MVF sent notices to the claimants requiring them to disclose, under 

penalty of perjury, any collateral recoveries they had received, Fulcrum directed the 

claimants to submit false collateral recovery update documentation to the MVF concealing 

the vast majority of the amounts that Fulcrum had previously paid them for the Madoff 

feeder fund shares and attendant rights and remission claims.  As a result of this deception, 

the MVF paid the claimants larger recoveries than they should have received.  The 

claimants then passed most of these amounts on to Fulcrum.   

5. As a result of the foregoing conduct, Fulcrum violated the FCA, and submitted or 

caused to be submitted false claims for payment to the MVF. 

JURISDICTION AND VENUE 

6. This Court has subject matter jurisdiction over the Government’s claims under the 

FCA pursuant to 31 U.S.C. § 3730(a) and 28 U.S.C §§ 1331 and 1345.  

7. This Court may exercise personal jurisdiction over Fulcrum pursuant to  

31 U.S.C. § 3732(a), which provides for nationwide service of process.  Further, because 

Fulcrum transacts business in this District and, in furtherance of the fraud alleged, caused 

false claims or statements to be submitted to the MVF in this District, venue is proper in 

this District pursuant to 31 U.S.C. § 3732(a) as well as 28 U.S.C. §§ 1391(b) and 1391(c). 

PARTIES 

8. Plaintiff is the United States of America.  Through DOJ, the United States 

administers the MVF.   

9. Defendant Fulcrum, a Delaware limited liability company, is an investment firm  

with its principal place of business in Austin, Texas. 

BACKGROUND 

A.  The False Claims Act 



 

4 

10. The False Claims Act was originally enacted in 1863 to address fraud on the 

Government in the midst of the Civil War, and it reflects Congress’s objective to “enhance 

the Government’s ability to recover losses sustained as a result of fraud against the 

Government.” See S. Rep. No. 99-345, at 1 (1986), reprinted in 1986 U.S.C.C.A.N. 5266.  

11. As relevant here, the FCA establishes treble damages liability to the Government 

where an individual or entity:  

(A) “knowingly presents, or causes to be presented, a false or fraudulent claim for 
payment or approval,” 31 U.S.C. § 3729(a)(1)(A); or 

(B) “knowingly makes, uses, or causes to be made or used, a false record or statement 
material to a false or fraudulent claim, id. § 3729(a)(1)(B). 

In addition to treble damages, the FCA also provides for assessment of a civil 

penalty for each violation or each false claim.  “Knowing,” within the meaning of the FCA, 

is defined to include a defendant acting in reckless disregard or deliberate indifference of 

the truth or falsity of information, as well as actual knowledge of such falsity by defendant.  

See id. § 3729(b)(1).  

B.  The Madoff Fraud, the Madoff Victim Fund, and the Remission Process 

13. From as early as the 1970s through December 2008, Bernard L. Madoff perpetrated 

the largest Ponzi scheme in history, defrauding thousands of direct and indirect investors in 

Bernard L. Madoff Investment Securities LLC (“Madoff Securities”) of billions of dollars 

(the  “Madoff Fraud”).  In March 2009, Madoff pleaded guilty to eleven federal felonies, 

including securities, mail, and wire fraud, and in June 2009, Madoff was sentenced to serve 

150 years in prison and forfeit over $170 billion.    

14. The SDNY has recovered over $9 billion related to the Madoff Fraud through civil 

and criminal asset forfeiture proceedings.  



 

5 

15. In 2013, DOJ created the MVF to distribute certain funds forfeited to the United 

States related to the Madoff Fraud to victims pursuant to DOJ remission regulations, 28 

C.F.R §§ 9.1-9.9 (the  “Regulations”), and appointed Richard Breeden as special master to 

oversee the MVF and assist DOJ in connection with remission proceedings for victims of 

the Madoff Fraud.    

16. From November 2013 through April 2014, the MVF received remission claims 

from tens of thousands of victims of the Madoff Fraud, and in November 2017, the MVF 

began making distributions to victims whose claims were approved by DOJ.  To date, the 

MVF has made eight distributions to more than 40,000 approved claimants.  

17. The MVF remission process is governed by the Regulations and the Plan of 

Distribution for the MVF approved by DOJ.  The MVF has published the Plan of 

Distribution on its website in the form of answers to frequently asked questions since 

November 2013. 

18. The Plan of Distribution and Regulations provide, among other things, that only 

victims of the Madoff Fraud are eligible to receive remission payments from the MVF, 

meaning that claimants must have lost their own money through the Madoff Fraud.  

Specifically, the Plan of Distribution states: 

a. To be eligible to participate in payments from the MVF, a person must be a 
“victim” of the fraud perpetrated through Madoff Securities. Any person who is not a 
victim of the Madoff fraud is not eligible to receive a payment of remission. 
 

b. Federal law defines a “victim” as “any person” who suffered a “pecuniary 
loss” as a “direct result” of crime. For purposes of the MVF, you qualify as a victim if 
you lost your own money as a direct result of investments that were rendered worthless 
by the Madoff fraud. 
 

19. The Plan of Distribution further states: “A victim is the person or entity that 

suffered a pecuniary loss as a direct result of the criminality that gave rise to the forfeiture 



 

6 

of assets in this case. That status cannot be purchased or transferred; indeed, the forfeiture 

laws and regulations forbid it. You are either a victim or you are not.”  The Regulations 

similarly provide that purchasers of remission rights are not eligible victims.  See 28 C.F.R. 

§ 9.2 (a victim for purposes of remission is “a person who has incurred a pecuniary loss as a 

direct result of the commission of the offense underlying a forfeiture” and generally “does 

not include one who acquires a right to sue the perpetrator of the criminal offense for any 

loss by assignment, subrogation, inheritance, or otherwise from the actual victim”). 

20. The Plan of Distribution and Regulations further provide that victims may recover 

only their pro rata share of the net losses they incurred as a result of the Madoff Fraud, 

calculated on a cash-in, cash-out basis, and that any collateral recoveries the victim has 

received from any source other than the MVF must be deducted from the net loss amount.  

Specifically, the Plan of Distribution states: 

a. It is your responsibility to establish to the satisfaction of the Ruling Official 
within the Department that you suffered a specific, net loss. 
 

b. There is a limited amount of money to compensate an enormous group of 
victims, some of whom have not yet received a penny. So, no double dipping will be 
allowed, and no one is eligible to recover more than his or her actual “net loss” on a cash-
in, cash-out basis.  
 

c. The starting point in measuring your loss is all the cash you invested in 
Madoff Securities, less any cash you received back. This establishes the cash that was 
taken from you, less your recoveries during the years of the fraud. 
 

d. Once your original “net loss” is known, the Department’s regulations require 
all “collateral recoveries” you have already received, or that you will receive in the future, 
to be deducted from a claim for remission.  
 
21. The Regulations generally require remission to be granted  “on a pro rata basis … 

when petitions cannot be granted in full due to the limited value of the forfeited property,” 

28 C.F.R. § 9.8(f), and prohibit remission where the victim already has been “compensated 

for the wrongful loss” or has “recourse reasonably available to other assets from which to 



 

7 

obtain compensation for the wrongful loss,” id. §§ 9.8(b)(4), 9.2(b)(5).  The Regulations 

further require any victim receiving remission payments to reimburse the United States “to 

the extent the individual later receives compensation for the loss … from any other source.”  

Id. § 9.8(g). 

22. The Plan of Distribution defines “collateral recoveries” broadly to cover any 

compensation a victim may receive from any source.  Specifically, the Plan provides: 

a. Collateral recoveries include any payments you received from the [Securities 
Investors Protection Corporation], all bankruptcy distributions (directly or through an 
intermediary) on all accounts you held, insurance or class action recoveries, or any other 
form of compensation you have received. You will have to certify under penalties of 
perjury the completeness and the accuracy of the disclosure of your recoveries to date.  
 
23. The MVF has issued Collateral Recovery Update (“CRU”) Notices to all eligible 

claimants in advance of each of its distributions.  Completion of the CRU form attached to 

the Notice or other updated collateral recovery disclosure is a condition precedent for being 

considered for a MVF distribution.  The CRU  Notices make clear that all collateral 

recoveries must be disclosed and that collateral recoveries include compensation from any 

source, including proceeds from the sale of claims for Madoff recoveries.  For example, the 

CRU Notices provide the following: 

a. [I]f you HAVE received payment relating to your Madoff losses from your 
investment fund, from class action litigation, from bankruptcy distributions, from the sale 
of your claim, or from any other source, then you must update us on your recoveries.   
 

b. The reason MVF needs this information is simple. Federal law prohibits MVF 
from paying anyone more than their actual losses. In addition, the amount of your next 
payment will be a specific percentage of your eligible Madoff fraud loss LESS all prior 
recoveries. Without knowing your prior recoveries, we can’t determine how much you 
should be paid. 
 

c. As with all prior MVF payouts, in order to be eligible for a payment you must 
complete a collateral recovery update.  If you are eligible for a … payment, the amount of 
your payment will be the distribution target recovery percentage of your approved fraud 
loss amount, less all prior recoveries from any source and previous MVF distributions.  
Therefore, MVF must ask you to update information on your total recoveries in order to 
calculate your potential payment.  



 

8 

 
24. From 2013 through the present, the MVF posted multiple notices on its website 

providing further clarification on what constitutes a collateral recovery and further 

explaining the importance of disclosing collateral recoveries to permit the MVF to properly 

calculate remission payments.  For example: 

a. August-December 2017 Update:  MVF previously sent you a collateral 
recovery update request explaining that: “Collateral recoveries include bankruptcy 
distributions, litigation recoveries, settlement proceeds, insurance recoveries, or any other 
compensation received for your Madoff losses.” Essentially, anything you received from 
anyone due to your Madoff loss is a collateral recovery. In particular, you need to report 
to MVF all payouts from the Madoff bankruptcy, as well as any proceeds you received as 
a result of the sale or assignment of your claim in either the bankruptcy or MVF 
proceedings.  
 

b. Spring 2018 Update:  MVF calculates individual victim payments based on 
what amount is required to bring an individual victim to a total percentage recovery of 
their eligible fraud loss, including all prior recoveries from other sources (sometimes 
called “collateral recoveries”). We describe that payout percentage… as the baseline 
recovery percentage, and it is likely to go up with each MVF distribution. Because the 
amount of recoveries from all sources received by a victim is part of the payment 
computation, every victim has been asked to provide periodic updates on their own 
recoveries from sources other than MVF.  Absent disclosure of outside recoveries, some 
investors would be paid more than the recovery percentage being paid to everyone else. 
 

FACTUAL ALLEGATIONS 
 

Fulcrum Engaged in a Scheme to Fraudulently Obtain  
Inflated Remission Payments From the MVF 

 
25. From at least October 2016 through October 2022, Fulcrum violated the FCA by 

fraudulently obtaining, as a non-victim of the Madoff Fraud, remission payments from the 

MVF to which it was not entitled.  Specifically, Fulcrum purchased recovery rights from 

various Madoff Fraud victims who had submitted remission claims to the MVF and 

compelled them to transfer any remission payments they received from the MVF to 

Fulcrum.   

26. Fulcrum also fraudulently compelled the claimants whose Madoff recovery rights it 

had purchased to submit false disclosures to the MVF, concealing the amounts Fulcrum 



 

9 

paid for those recovery rights.   As explained above, to prevent MVF claimants from 

receiving duplicative recoveries, the Regulations and MVF Plan of Distribution require (i) 

MVF claimants to report all collateral recoveries received, including proceeds from the sale 

of any Madoff recovery rights or MVF claims, and (ii) the MVF to reduce remission 

payments by the amount of such  collateral recoveries.  Compliance with these 

requirements would have resulted in Fulcrum obtaining substantially smaller remission 

payments from the MVF.  Therefore, as a result of Fulcrum’s fraudulent concealment of 

these collateral recoveries, the MVF made inflated remission payments to the victims, 

which they in turn paid over to Fulcrum. 

A.  Fulcrum Purchased Madoff Recovery Rights From MVF Claimants 

27. Through a number of transactions during 2014-2019, Fulcrum purchased Madoff 

claims and MVF recovery rights from multiple victims of the Madoff Fraud. 

28. Luxalpha SICAV (“Luxalpha”) was a Luxembourg-based investment fund that 

operated as a Madoff Securities feeder fund, and its underlying investors suffered losses as 

a result of the Madoff Fraud.   

29. Among the persons and entities who were beneficial owners of Luxalpha shares 

were:  (i) Carac, a public pension fund based in Paris, France; (ii) a group of investors in a 

fund called “Fondaco Absolute Return,” which was managed by Fondaco SGR S.p.A. 

(“Fondaco”), an institutional asset management company based in Torino, Italy (the 

“Fondaco Investors”), including Compagnia di San Paolo (“CSP”), a foundation based in 

Torino, Italy; and  (iii) a group of individuals located in France, named Bruno Plancke, 

Michel Plancke, Olivier Plancke, Thierry Plancke, and Virginie Reant Plancke (the 

“Planckes”). 



 

10 

30. In February, March and April 2014, Carac, the Fondaco Investors, and the Planckes 

(the “Claimants”) each filed claims with the MVF seeking remission payments for losses 

they claimed to have incurred as a result of their investments in Madoff Securities through 

Luxalpha.  

31. Fulcrum subsequently purchased the Claimants’ Luxalpha shares and attendant 

rights and MVF claims.  Specifically, Fulcrum purchased Fondaco’s Luxalpha shares in 

July 2014, Carac’s Luxalpha shares in October 2014, and the Planckes’ Luxalpha shares in 

January 2019.  Fulcrum immediately resold the Fondaco and Carac shares to third parties, 

but purported to retain rights to most of the Claimants’ MVF remission payments.  In 

particular, Fulcrum entered into Purchase and Sale Agreements (“PSAs”) with Carac, CSP, 

and the Planckes pursuant to which Fulcrum purported to acquire their rights to receive 

remission payments from the MVF.    

32. Fulcrum knew that, pursuant to the Regulations and the Plan of Distribution, 

Fulcrum was not eligible to receive remission payments directly from the MVF because 

Fulcrum was not a Madoff Fraud victim and had merely purchased the Claimants’ 

Luxalpha shares and attendant rights and MVF remission claims.  Accordingly, as part of 

the PSAs, Fulcrum required Carac, CSP, and the Planckes to transfer any amounts they 

received from the MVF to Fulcrum.  Specifically, as part of the PSAs, Carac, CSP, and the 

Planckes agreed that they would retain no beneficial interest in any distributions they 

received from the MVF, that they would hold any such distributions as agents of Fulcrum, 

and that they would deliver any such distributions to Fulcrum within five days of receipt.   

B.  Fulcrum Fraudulently Directed the Claimants to Submit False Claims or 
      Statements to the MVF in Order to Obtain Inflated Remission Payments 
 
33. Fulcrum knew that, pursuant to the Regulations and Plan of Distribution, the 

Claimants were required to report to the MVF all collateral recoveries they received, 



 

11 

including proceeds from the sale of their Luxalpha shares and MVF remission claims, and 

that the MVF would reduce any remission payments to the Claimants by the amount of the 

collateral recoveries they reported.   

34. For example, in internal emails in or about August 2017, Fulcrum representatives 

circulated and discussed the MVF’s August-December 2017 Update reiterating that 

collateral recoveries, which reduce remission payments, include “any proceeds [claimants] 

received as a result of the sale or assignment of [their] claim in either the bankruptcy or 

MVF proceedings.”   

35. To ensure that the MVF would not reduce the Claimants’ remission payments by 

the amounts Fulcrum had paid the Claimants for their Luxalpha shares and attendant rights 

and MVF remission claims, Fulcrum acquired the right to control Carac’s, CSP’s, and the 

Planckes’ communications with the MVF and fraudulently required them to conceal this 

collateral recovery information from the MVF. 

36. Specifically, under the PSAs, Carac, CSP, and the Planckes granted Fulcrum 

irrevocable power of attorney with respect to the remission claims and authorized Fulcrum 

to act in each of their names, places, and steads with respect to those claims.  Further, 

Carac, CSP, and the Planckes agreed to deliver all correspondence they received from the 

MVF to Fulcrum and take all actions requested by Fulcrum to effectuate the terms of the 

PSAs. 

37. From October 2016 through October 2022, the MVF sent multiple CRU Notices to 

the Claimants requesting that they identify all compensation received from any source 

other than the MVF, including proceeds from the sale of Madoff claims.  Pursuant to the 

PSAs, Fulcrum received Claimants’ copies of the CRU Notices, and fraudulently instructed 

or otherwise caused the Claimants to submit false CRU responses to the MVF that failed 



 

12 

fully to disclose the amounts the Claimants had received from selling their Luxalpha shares 

and related rights and remission claims to Fulcrum.      

38. For example, in September 2017 and May 2019 pursuant to the PSA and at 

Fulcrum’s behest, Carac submitted two CRU responses to the MVF that falsely represented 

that Carac had received no collateral recoveries, when in fact it had received significant 

sales proceeds from Fulcrum.  

39. Similarly, from February 2017 through July 2019, pursuant to the PSA and at 

Fulcrum’s behest, CSP submitted four CRU responses to the MVF that falsely failed to 

disclose the full amount that CSP had received from Fulcrum for its Luxalpha shares and 

related rights.  CSP stated that it had sold its remission claim to an unidentified secondary 

market player for a specified amount, but this amount reflected only the smaller amount 

CSP received from Fulcrum for the purported sale of its remission rights, rather than the 

total proceeds CSP received from Fulcrum for the sale of its Luxalpha shares and related 

rights.   

40. In or about August 2017, representatives of CSP encouraged Fulcrum to reach out 

to the MVF to confirm whether the sales proceeds Fulcrum had received constituted 

collateral recoveries, but Fulcrum refused to do so, and instead insisted that CSP submit 

false disclosures to the MVF concealing the Fondaco Investors’ sale of their Luxalpha 

shares and attendant rights to Fulcrum. 

41. From February 2017 through July 2019, the Fondaco Investors other than CSP 

likewise submitted twenty-eight CRU responses to the MVF that falsely represented that 

these investors had received no collateral recoveries, when in fact they had received 

significant sales proceeds from Fulcrum.  



 

13 

42. From August 2019 through October 2020, pursuant to the PSA, and at Fulcrum’s 

behest, the Planckes submitted twenty CRU responses to the MVF that falsely represented 

that the Planckes had received no collateral recoveries other than those they received from 

a financial intermediary in connection with a litigation settlement, when in fact they had 

received significant additional proceeds from Fulcrum for the sale of their Luxalpha shares 

and attendant rights and MVF remission claims.   

43. Fulcrum knew that the aforementioned CRU responses that the Claimants submitted 

to the MVF were false.  

44. Fulcrum’s misrepresentations concerning collateral recoveries were material to the 

MVF’s and DOJ’s remission payment decisions.  As noted above, prior to each MVF 

distribution, MVF claimants have been required to certify under penalty of perjury to the 

truthfulness and accuracy of their CRU responses as a condition precedent to receiving a 

remission payment.  Had Fulcrum disclosed, or caused the Claimants to disclose, the 

amounts the Claimants had received from Fulcrum for the sale of their Luxalpha shares and 

attendant rights and MVF remission claims, the MVF would have reduced the Claimants’ 

respective remission payments by the amount of those sales proceeds. 

45.  As a result of Fulcrum instructing or otherwise causing the Claimants to submit 

false collateral recovery information as described above, the MVF distributed remission 

payments to the Claimants that they were not entitled to receive.  Pursuant to the PSAs, 

Carac, CSP, and the Planckes then transferred the amounts they had improperly received 

from the MVF to Fulcrum. 

 

 

 



 

14 

CLAIMS FOR RELIEF 

FIRST CLAIM 

Violations of the False Claims Act: Presenting False Claims for Payment 
31 U.S.C. § 3729(a)(1)(A) 

 
46. The Government incorporates by reference paragraphs 1 through 45 above as if 

fully set forth in this paragraph. 

47. The Government asserts claims against Fulcrum under 31 U.S.C. § 3729(a)(1)(A). 

48. Fulcrum knowingly, or acting with deliberate ignorance or reckless disregard for 

the truth, presented, or caused to be presented, false or fraudulent claims for payment or 

approval to the MVF in violation of 31 U.S.C. § 3729(a)(1)(A).  Specifically, Fulcrum 

fraudulently instructed or otherwise caused the Claimants to submit false claims to the 

MVF that failed to identify collateral recoveries the Claimants had received from Fulcrum 

for the sale of their Luxalpha shares and attendant rights and remission claims to the MVF. 

49. As a result of these false or fraudulent claims, the MVF made inflated remission 

payments to the Claimants to which they were not entitled.  Carac, CSP, and the Planckes 

then transferred these amounts they had unlawfully received from the MVF to Fulcrum. 

50. By reason of the false or fraudulent claims or statements that Fulcrum knowingly 

presented, or caused to be presented, for payment or approval, the Government has been 

damaged in a substantial amount to be determined at trial, and is entitled to recover treble 

damages plus a civil monetary penalty for each false claim. 

SECOND CLAIM 
  

Violations of the False Claims Act: Use of False Statements 
31 U.S.C. § 3729(a)(1)(B) 

 
51. The Government incorporates by reference paragraphs 1 through 50 above as if 

fully set forth in this paragraph. 



 

15 

52. The Government asserts claims against Fulcrum under 31 U.S.C. § 3729(a)(1)(B). 

53. Fulcrum knowingly, or acting with deliberate ignorance or reckless disregard for 

the truth, made, used, or caused to be made or used, false records or statements that were 

material to false or fraudulent claims for payment submitted to the MVF.  Specifically, 

Fulcrum fraudulently instructed or otherwise caused the Claimants to submit false 

disclosures to the MVF that concealed collateral recoveries the Claimants had received 

from Fulcrum for the sale of their Luxalpha shares and attendant rights and  remission 

claims to the MVF. 

54. As a result of these false or fraudulent disclosures, the MVF made inflated 

remission payments to the Claimants to which they were not entitled.  Carac, CSP, and the 

Planckes then transferred these amounts they had unlawfully received from the MVF to 

Fulcrum. 

55. By reason of these false records or statements, the Government has been damaged 

in a substantial amount to be determined at trial and is entitled to recover treble damages 

plus a civil monetary penalty for each false record or statement. 

PRAYER FOR RELIEF 

 WHEREFORE, plaintiff, the Government, requests that judgment be entered in its 

favor as follows: 

1. On the First and Second Claims for relief (violations of the FCA, 31 U.S.C. §§ 

3729(a)(1)(A) and 3729(a)(1)(B)), a judgment against Fulcrum for treble the 

Government’s damages, in an amount to be determined at trial, plus a civil penalty in the 

maximum applicable amount for each violation of the FCA by Fulcrum; 

2. An award of costs incurred by the Government pursuant to 31 U.S.C. § 

3729(a)(3); and  



 

16 

3. Such further relief as is proper. 

Dated: New York, New York 
 September __, 2023 
      DAMIAN WILLIAMS 

United States Attorney for the 
Southern District of New York 
       

     By:  /s/  Pierre G. Armand   
PIERRE G. ARMAND 
Assistant United States Attorney 
United States Attorney’s Office 
86 Chambers Street, 3rd Floor 
New York, NY 10007 
Tel: (212) 637-2724 
Email:  [email protected] 
Attorney for the United States of America