Madoff Feeder-Fund Victims Can Now Tap Forfeited Cash
Victims of Bernard L. Madoff’s Ponzi scheme can start making claims against a $2.35 billion fund of money forfeited to the government, even if they didn’t invest directly with him, prosecutors said.
People who lost money that feeder funds put into Madoff’s fraudulent enterprise can bring claims for the first time, Manhattan U.S. Attorney Preet Bharara said today in a statement. Irving Picard, the trustee liquidating Madoff’s firm, has said that only victims who invested directly with Madoff are eligible to claim the funds he administers.
“With today’s announcement, we take a great step forward in returning the $2.35 billion collected so far to Madoff’s victims, and we hope to return even more,” Bharara said in the statement.
The Madoff Victim Fund includes about $2.2 billion recovered in a 2010 settlement with the estate of Madoff investor Jeffry Picower, Bharara said. Most of the rest comes from civil and criminal forfeiture actions against Madoff investor Carl Shapiro, Madoff’s brother Peter Madoff and Bernard Madoff himself.
The fund is overseen by Richard Breeden, a former chairman of the U.S. Securities and Exchange Commission.
Amanda Remus, a spokeswoman for Picard, called today’s announcement “an important development in the Madoff recovery effort.”
“Every distribution is critical and we wish Mr. Breeden and his team much success in the process that is now under way,” Remus said today in a statement.
The move to open the fund to claims comes as prosecutors from Bharara’s office are in a trial against five former Madoff employees charged with aiding his fraud.
Madoff, 75, pleaded guilty in 2009 to orchestrating the biggest Ponzi scheme in history. He’s serving a 150-year sentence in federal prison in North Carolina.
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