Scores of Bernard Madoff’s former customers are pushing for access to a massive database of trading records and other documents seized from the con man’s now-defunct securities firm to advance a fringe theory about the epic fraud: It wasn’t a Ponzi scheme.

Bizarre though it sounds, there’s a reason why they’re advancing the claim: If it wasn’t a Ponzi scheme, they needn’t surrender more than $100 million in what the trustee of Madoff’s firm calls false trading profits.

The customers say they can prove that Madoff used cash from his investment advisory customers to buy billions of dollars in Treasuries and held Fortune 100 stocks that appeared on their statements. That, they argue, would defeat the trustee’s claim that it was all a Ponzi scheme in which no real trading took place -- a theory the trustee calls pure fiction.

"The standard for a Ponzi scheme is that there is no legitimate business, but Madoff was the single largest market maker in the world," said lawyer Helen Davis Chaitman, who represents about 70 customers. "I believe I can prove that securities were purchased for some of my customers."

The dispute highlights how almost a decade after Madoff admitted using money from new investors to repay older ones, basic elements of one of the biggest scandals in history are still hotly contested by some victims.

Madoff Victims Near Full Recovery of Initial Funds (Audio)

The trustee of Madoff’s firm, Irving Picard, has recovered more than $13 billion for victims, largely by suing customers who withdrew more money from Madoff than they put in -- what he calls fake profit. But Chaitman says Picard is wrong. She contends it was the U.S. Securities and Exchange Commission that was defrauded because Madoff lied about his trading losses and debt load -- but not about the trading itself.

As a result, customer claims for losses should be based on their final account statements -- a total $64 billion for all Madoff clients -- rather than their total lost principal of $17.5 billion, she says.

“They haven’t proved it, after all this time and all this money,” Carol Neville, another lawyer for the customers, said at a July 25 bankruptcy court hearing in New York.

Since 2016 Chaitman has sought access to a collection of 30 million documents from the business and Madoff’s market-making unit, searching for any paper trail linking real securities to the investment advisory cash. The database contains every shred of evidence from Madoff’s offices, from the contents of floppy disks and hard drives, to the papers that were found on employees’ desks when the authorities arrived.

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