About eight years ago, former financier and stockbroker Bernard Madoff was at the center of an elaborate Ponzi scheme. When the Madoff Investment Scandal leaked out in December that year, the former NASDAQ Chairman met his downfall.
Now, years later, the victims of the Madoff Ponzi Scheme will receive an early holiday treat from the trustee who unravelled Madoff's fraud. The trustee is to release an average of $1.1 million checks as payout--a total of $1.2 billion in recovered funds.
The biggest payout comes out a week before the anniversary of Madoff's arrest. On Dec. 11, 2008, thousands of charities, retirees, investment funds and other clients discovered that they had lost $17.5 billion in principal in the decades-long Ponzi scheme.
Trustee Irving Picard said that the latest payout will boost distributions to more than $9.16 billion, and will be given to holders of 1,071 accounts at the now-defunct Bernard L. Madoff Investment Securities LLC. The amount is about 57 percent of the victims' lost cash.
Picard said the payout will range from $1,298 to $202 million and it is part of the sixth distribution of funds. As soon as the payout is finished, 1,269 account holders, especially the victims who lost $1.16 million or less, will have received their cash whole.
"This is another major milestone in this massive recovery effort. I commend Mr. Picard, his chief counsel David J. Sheehan, and their global team for their tireless efforts. We look forward to the Trustee's next announcement of additional distributions at the earliest possible time," said Stephen Harbeck, CEO and President of Securities Investor Protection Corporation (SIPC).
Picard said he will send out another $320 million as payouts after pending litigation is resolved. He has reached and recovered agreements to retrieve nearly $10.91 billion or about 62 percent of the funds that holders had lost.
Meanwhile, the United States Department of Justice has not yet distributed anything from its $4 billion Madoff Victim Fund, reports said. The fund includes proceeds of a forfeiture agreement with one of the biggest holders in Madoff's Wall Street firm. The Madoff Victim fund is overseen by Richard Breeden, the former Chairman of the U.S. Securities and Exchange Commission. Experts said the fund has been assessing thousands of claims since December 2012.
The latest distribution of funds was allowed after the Supreme Court rejected an appeal from victims who said they should receive interest on their losses. Madoff's victims believe that overall, their losses were $64 billion, counting profit from fake securities trading.
Madoff pleaded guilty in 2009 and is now serving a 150-year sentence.
