Good News For Madoff Victims: $7.2 Billion Recovered

VIDEO: Largest forfeiture in U.S. history gives victims hope of recovering some losses.
Share
Copy

In the biggest win yet for victims of Bernie Madoff, the estate of the single biggest beneficiary of Madoff's fraud agreed to pay $7.2 billion to the victims' recovery fund and the Department of Justice.

Irving Picard, the trustee recovering money for Madoff's victims, announced Friday that he had cut a deal with the estate of the late Jeffry Picower that would reap $5 billion for the victims' fund, with another $2.2 billion to be distributed to victims via the U.S. government. Picard had earlier recouped almost $6 billion for victims, meaning he has now made real headway in recovering lost funds; total investor losses have been estimated at about $20 billion.

Picard said the importance of the Picower settlement could not be overstated, "as it shows significant progress in our efforts. ... Every penny of this $7.2 billion settlement will be distributed to BLMIS [Bernard L. Madoff Investment Securities] customers with valid claims."

"People who two years ago faced the devastating prospect of losing everything now stand to recover a significant portion of their investment," said FBI assistant director-in-charge Janie Fedarcyk.

U.S. Attorney Preet Bharara called the settlement "historic" and a "game-changer," and praised Barbara Picower, Jeffry's widow and the executor of his estate, for agreeing to it.

"By returning every penny of the $7.2 billion her late husband received from BLMIS to help those who have suffered most, Barbara Picower has done the right thing," said Bharara.

Picower was one of Madoff's early investors and withdrew about $7 billion in profits from his account over three decades. The 67-year-old Palm Beach, Florida philanthropist drowned after suffering a heart attack in his swimming pool on Oct. 25, 2009, just under a year after Madoff's Ponzi scheme unraveled.

In a statement, Barbara Picower called Madoff's fraud "deplorable" and said she hoped the setllement would ease the suffering of victims.

Said Picower, "I believe that this settlement honors what Jeffry would have wanted, which is to return this money so that it can go directly to the victims of Madoff."

She also emphasized that her husband was never charged with a crime, and that she was confident he was not complicit in the fraud. The trustee had claimed in court papers that Picower should have realized that his profits were unnaturally high and likely based on fraud.

Picard Sues HSBC For $9 Billion

In recent weeks, Picard has filed suits against hundreds of individual investors and big companies like JP Morgan, HSBC and UBS, which bring the total amount sought by Picard in the so-called "clawback" to at least $56 billion.

Through the end of September, Picard had filed 19 lawsuits worth $15.5 billion against longtime individual investors like Picower, members of Madoff's immediate family, and major feeder funds, including those operated by the Fairfield Greenwich Group and J. Ezra Merkin, a prominent Wall Street investment manager.

Picard followed by suing hundreds of individual investors believed to have profited from Madoff's multi-billion-dollar investment scheme by receiving more from Madoff than they paid in. Those suits ask for amounts ranging from $500,000 to $60 million, and total $3.5 billion.

Page
  • 1
  • |
  • 2

Join the Discussion
blog comments powered by Disqus
 
You Might Also Like...