Madoff Fraud Distributions Will Soon Pass $6 BillionBy
More than five years have passed since Irving Picard was first appointed trustee to oversee the liquidation of Bernard L. Madoff Investment Securities. The New York bankruptcy lawyer and his team have already recovered or entered into agreements to recover nearly $9.795 billion of the approximately $20 billion defrauded from Madoff’s investment customers.
This week the trustee’s office announced that a fourth distribution will pay out another $349 million to the Ponzi scheme victims, bringing total payments to more than $6 billion (more than 46 percent of claimants’ losses). “Our commitment is simple: to recover the maximum amount of funds stolen in the Madoff Ponzi scheme and to distribute these funds to their rightful owners as quickly as possible,” Picard said in a statement.
You’ve got to hand it to Picard and his team for aggressively pursuing every possible avenue in this complicated and emotionally fraught matter. Of the total fraud estimate, Picard is looking to recoup as much as he can of $17.5 billion—the losses by those Madoff customers who filed eligible claims by a July 2009 deadline.
The next distribution, which must first be approved by the U.S. Bankruptcy Court in New York, will cover claims relating to 1,080 Bernard L. Madoff Investment Securities accounts. A hearing on the allocation is scheduled for April 17.
Most of the funds in the $349 million pool, nearly 80 percent, come from a $325 million settlement that Picard reached with JPMorgan Chase in February. That came after a drawn-out fight in which Picard had accused the bank of ignoring signs of fraud, thus allowing the scam to continue for years. He’s similarly going after other banks, including UBS, HSBC, and UniCredit, according to this Bloomberg report.
The average payment for an allowed claim issued in the fourth distribution will be approximately $323,000—the smallest payment will be $496 and the largest $77.3 million. To date, the claims of 1,109 account holders have been fully satisfied. That number will increase to 1,129 once the fourth distribution is made.
Meanwhile, the work is bound to continue for several more years, especially with many pending legal cases. “Given the size and scope of the fraud, this is extraordinary progress,” Picard has said. “And we are not done yet.”