Payback Time: Madoff Victims Compensation Fund is Growing

May 27, 2009— -- More than two hundred investors in Bernard Madoff's $65 billion Ponzi scheme are one step closer to receiving some of their money back, according to the appointed bankruptcy trustee who is liquidating Madoff's assets. As of this week, letters have been sent to commit more than $116 million to satisfy claims from 237 Madoff victims.

Those investors will receive up to $500,000 from the Securities Investor Protection Corporation (SIPC), an organization founded by Congress to protect investors. The bankruptcy trustee Irving Picard says his office has received nearly 9,000 claims from jilted Madoff investors.

Picard called Madoff's scam the "most complicated and far reaching financial fraud in U.S. history."

Slowly but steadily though the fund to compensate Madoff investors continues to grow. On Tuesday, two hedge funds connected to Banco Santander reached a $235 million settlement with Picard. Optimal Investment Services withdrew more than $275 million from their two accounts within 90 days prior to Madoff's arrest, according to documents filed in bankruptcy court Tuesday. The $235 million settlement represents 85% of the original claim.

"I am very pleased that we reached such a favorable settlement with Optimal and that Optimal will pay more than $235 million to resolve the claims against it," Picard said in a statement. "We hope that other entities against which we have claims will likewise come forward to settle those claims for the benefit of all of Madoff's victims."

Opitmal was "not complicit in the fraud perpetrated by BLMIS and Bernard Madoff on BLMIS's customers and did not have actual knowledge of the fraud," Picard concluded in documents filed in bankruptcy court.