Madoff Victims Frustrated as Wait Continues for Claims to be Paid
Money repaid slowly as investors' retirements stalled and homes in jeopardy.
April 20, 2009— -- 8,500 victims of Bernard Madoff's self-confessed $65 billion Ponzi scheme have filed claims to recover the remains of their investments. But more than three months after those claims began being filed, only 30 -- totaling $15 million dollars -- have been paid; a snail's pace resolution that has left many Madoff investors with retirements stalled, home ownership in jeopardy and an unforeseen return to the workforce well in their sunset years.
And those personal setbacks and tragedies have been set against the backdrop of what a federal bankruptcy judge today stopped just short of calling a "turf war" between agencies asserting their actions are on the victims' behalf.
"I don't want to see or hope not to see a turf war," U.S. Bankruptcy Judge Burton Lifland said at a hearing today, where he put Madoff's personal assets under control of a separate bankruptcy trustee. The assets of Madoff's business have been under the control of a trustee since December.
Lifand's ruling came at about the same time as the federal judge presiding over Madoff's criminal case blocked him and his wife Ruth from disposing of assets including their homes, investments, boats and business ventures as well as real estate, cash, bonds, art, boats and cars. The government has identified $100 million in such assets. The couple's residence in Palm Beach, Florida, a yacht called "Bull" and a smaller boat have been seized by the U.S. Marshals Service.
At issue for the agencies is who will control the personal assets. That was not immediately clear. And from the perspective of the trustee already in place to oversee the bankruptcy of Madoff' investment vehicle, according to sources, there was great potential for overlap since ownership of assets is often difficult to ascertain when a business, such as Madoff's, is largely controlled by one person, and some of its fruits are in the business name – vehicles for example - and others are in the owner's name or the names of his family members or associates.
At issue for the victims is just how well their interests are being represented by the agencies involved in the matter — the Securities and Exchange Commission, the Department of Justice and the Securities Investor Protection Corp. The U.S. Attorney's office would not comment on the issue, when it was raised by ABC News on Friday.
Forcing Bernie Madoff into Personal Bankruptcy
"We do not believe they have an overall strategy," says Jonathan Landers, a bankruptcy attorney who heads that practice at Milberg LLP and is representing between 70 and 80 clients whose losses to Madoff exceed a half billion dollars. "We think it is very much catch as catch can," he told ABC News.
Lifland's ruling today echoed that concern. "It's quite plain that there has been disjointed, uncoordinated activities taking place," Lifland said.
Landers brought the successful action on behalf of his clients to force Madoff into personal bankruptcy. His clients are part of a larger group that is angry over the perception that they have been publicly stigmatized as rich and greedy and not worthy of sympathy, frustrated over the pace of claims processing, and worried that by the time any of the money arrives it may be too late.
Hundreds of these Madoff victims – roughly 400 in all – have banded together into two affinity groups and have launched a campaign of letter writing, telephone calling, media appearance and lobbying their local political representatives
