Madoff 'Losers' Get Only $534 Million; 'Winners' Get Zero
Securities industry fund denies more victims' claims than it allows.
Oct. 28, 2009— -- More than half of the customers of conman Bernie Madoff have had their claims for restitution denied by the securities industry fund meant to insure them, officials said today.
The bankruptcy trustee, Irving Picard, said today that more customers made money than lost money in the decades long scam.
2,568 customers took out more than they initially deposited and will receive no restitution, Picard said. In some cases, Picard's lawyers plan to seek a return of their profits, but he said today, "We're not going to be suing people who have no money or might lose their homes."
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Picard said only 2,335 of Madoff's customers had net losses. Of those, 1,368 have had their claims approved and the Securities Investor Protector Corporation fund has committed $534 million in payments for them.
The maximum amount the fund pays is $500,000 and, in effect, the fund will only be reimbursing Madoff's victims for about one of every eight dollars they lost, given total losses calculated by Picard at $21.26 billion.
The figure is substantially smaller than the original estimates of losses exceeding $64 billion.
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Picard, who also serves as the bankruptcy trustee in the Madoff case, said he had recovered only $1.4 billion of the missing $21 billion.
"I anticipate more will be coming in during the next few weeks," Picard said.
More than a third of the losses, $7.2 billion, ended up in the hands of Jeffry Picower, the close Madoff associate who died of a heart attack Sunday at his Palm Beach mansion.
Picard had already sued Picower to seek the return of the money and he said today that the sudden death complicates but does not end the efforts to go after Picower money.