Picower Estate Said to Pay $7.2 Billion in Biggest Madoff Fraud Settlement
The estate of Jeffry Picower, an investor with imprisoned con man Bernard Madoff, agreed to pay $7.2 billion to recover money he made from the fraud.
Picower’s estate will pay $5 billion to Irving Picard, the trustee overseeing the liquidation of Madoff’s firm, and $2.2 billion to U.S. authorities, according to two people familiar with the matter who declined to be identified because the settlement isn’t public. Picard has recovered $2.5 billion for other investors to date.
The $7.2 billion represents the entire amount that Picard sought in a May 2009 lawsuit claiming Picower should have known Madoff ran a Ponzi scheme. Picard has filed hundreds of suits against banks, feeder funds, investors and others alleged to have profited from Madoff’s decades-long fraud.
Picower, a billionaire, had a heart attack and drowned in his swimming pool in Palm Beach, Florida, in October 2009. He was 67. Picard claimed Picower, his charitable foundation and related entities withdrew $7.2 billion from Madoff’s firm over 20 years, including $2.4 billion in the six years before Madoff’s arrest.
William Zabel, an attorney for Picower’s widow Barbara, said in August that the settlement range was between $2.4 billion and $7.2 billion. Zabel didn’t return calls seeking comment. Picard and Ellen Davis, a spokeswoman for U.S. Attorney Preet Bharara in New York, declined to comment.
Bharara and Picard will announce the settlement today at 12 p.m.
This month, Picard sued Bank Medici AG and its founder, Sonja Kohn, as well as Bank Austria, UniCredit SpA and dozens of other parties. He is seeking $19.6 billion from them, which could triple to $58.8 billion under the Racketeer Influenced and Corrupt Organizations Act.
In a settlement announced Dec. 8, the family of Boston philanthropist Carl Shapiro agreed to pay back $625 million in Madoff profits. Under the agreement, the Shapiros agreed to pay $550 million to Picard for distribution to Madoff creditors. The family also agreed to pay $75 million to the Justice Department, which named Picard as special master to distribute the funds.
The deadline for Picard to file claims expired Dec. 11, the two-year anniversary of when Madoff confessed the biggest Ponzi scheme in U.S. history. He is serving a 150-year prison term.
In Picower’s will, dated 10 days before he died, Picower left $200 million in cash to his wife. He also left $25 million to his daughter, Gabrielle Picower, and about $15 million to 20 other beneficiaries. The unspecified remainder is to go to charity.
To contact the reporters on this story: Joshua Gallu in Washington at firstname.lastname@example.org; David Voreacos in Newark, New Jersey, at email@example.com; Erik Larson in New York at firstname.lastname@example.org.