Bad News for Madoff Victims: Too Many Claims, Not Enough Money

Many of the victims of Ponzi scammer Bernard Madoff's $65 billion fraud are in dire straits, and there may not be enough money to go around, according to a report filed in U.S. Bankruptcy Court in the Southern District of New York yesterday.

The filing, from court-appointed trustee Irving Picard, who is tasked with liquidating Madoff's assets, reports that at least 15,400 claims have been filed by victims. There was a flurry of filings just before the July 2 deadline.

The fund's hardship program, which applies to Madoff victims "facing severe hardship," includes those who can no longer pay their medical bills or afford basic living expenses, those who are 65 or older and must return to work, or those who have declared bankruptcy. So far, 258 such claims have been received and 152 have been approved.

The hardship program was initiated in May to expedite claims for "customers who have been hardest hit" by Madoff's Ponzi scheme.

In the report, Picard also says he doesn't currently believe "there will be sufficient funds in the debtor's estate" to make monetary distributions to "priority, non-priority general creditors and/or broker dealers" – a group made up largely of vendors, employees, taxing authorities, and customers filing claims on non-customer proof of claim forms.

Madoff Assets Spread Across 12 Countries

The new filing also reveals the challenges involved in locating Madoff's assets and "corporate entities of interest," which are "tangled" across 12 countries and territories - England, Gibraltar, Bermuda, British Virgin Islands, Cayman Islands, Bahamas, Ireland, France, Luxemburg, Switzerland, and Spain.

The trustee "has unearthed a labyrinth of interrelated funds, institutions, and entities of almost unparalleled complexity and breath [sic]," the report says.

In Gibraltar, the trustee is seeking the return of $150 million from numerous funds and banks affiliated with Madoff's investment firm. In Bermuda, Picard is trying to recover $257 million from three funds.

Madoff's Season Sports Tickets

Madoff's assets that have already been liquidated are a reminder of the luxury lifestyleRuth enjoyed for years: season tickets to the New York Knicks, New York Rangers, and New York Mets, as well as tickets to Minnesota Wild games and NASCAR. These high-priced items recovered more than $91,000.

The return of a shared ownership in a private jet recouped more than $750,000.

In addition, several Senators, Congressman and groups such as the Democratic Senatorial Campaign Committee and the Police Athletic League have returned more than $144,000 in political donations.

During the investigation, Picard has issued more than 230 subpoenas. He says in the report he needs much more time to determine the final amount of victim claims.

Picard has signed off on 543 claims worth more than $231 million.

Joel Stonington contributed to this report.

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