Madoff’s Tangled Web Begins to Unravel

By Sadie Bass

Jul 10, 2009 12:34pm

ABC's Aaron Katersky reports from New York: Almost seven months after Bernie Madoff turned himself in, the scope of his scam is becoming clearer. “The trustee has unearthed a labyrinth of interrelated international funds, institutions and entities of almost unparalleled complexity and breadth,” trustee Irving Picard writes in his interim report to bankruptcy court.  There are assets spread across 12 different countries that are “tangled” and have “complicated corporate structures and jurisdictional issues.” Picard says victims filed a total of 13,700 claims.  That’s far more than the 9,000 or so originally reported, but apparently there was a flurry of filings just ahead of the July 2 deadline.  So far 543 claims have been paid with 231-million dollars.    Some of Madoff’s victims were left particularly destitute.  258 claims were made to the trustee’s hardship program.  Those are people who can no longer pay their medical bills or for basic living expenses, those who are 65 or older and must return to work and those who have declared bankruptcy.  Picard says he and the SIPC are trying to speed up payment of these claims. There is bad news for a certain class of claimants.  As Picard puts it, “The trustee does not currently believe that there will be sufficient funds in the debtor’s estate from which to make distributions to priority, non-priority general creditors and/or broker dealers.”  These are mostly vendors, employees and brokerage firms who did business with BLMIS. About a billion of the $13.7 billion prosecutors say was lost in the Ponzi scheme has been recovered.  That includes money from bank accounts, private aircraft, insurance refunds, returned political donations, tax refunds, cancelled vehicle leases and season tickets to the Knicks and Rangers.

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