Recovery Comes Slowly for Madoff Victims

Three years after the scam, legal setbacks put payments on hold
Photograph by Jin Lee/Bloomberg

Last year, Irving Picard, the trustee responsible for liquidating Bernard Madoff’s firm, said he hoped to pay customers victimized by the convicted swindler as much as $65 billion. He filed claims totaling $100 billion in lawsuits against investment funds that funneled money to Madoff, banks that Picard said aided the fraud, and clients who took out more money from their Madoff accounts than they put in. That strategy has collapsed as Federal judges led by U.S. District Judge Jed Rakoff in New York have dismissed about $90 billion of Picard’s claims, saying he exceeded his powers or failed to prove his case. “There is a huge risk about making predictions, because you can never be sure what a court will do,” says Chip Bowles, a bankruptcy lawyer with Bingham Greenebaum Doll in Louisville, who is not involved in the matter.

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