Thursday, October 28, 2021

Victims of Madoff Ponzi scheme to get additional $568M payout

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The Justice Department announced Thursday that additional funds totaling more than $568 million have been distributed to nearly 31,000 victims of the Bernard L. Madoff Investment Securities LLC (BLMIS) fraud scheme.

The agency said the Madoff Victim Fund’s (MVF) seventh distribution in funds forfeited to the US. government brings the total funds distributed to more than $3.7 billion to nearly 40,000 victims across the globe.

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The series of payments will eventually return more than $4 billion to victims as compensation for losses they suffered due to the collapse of the BLMIS.

Additionally, the Justice Department noted, more than 2,600 victims will receive their first payment from the fund – overseen by former SEC Chairman Richard Breeden – in this distribution.

“This distribution provides nearly 31,000 victims additional financial recovery from the egregious crimes committed by Bernard Madoff,” Acting Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division said in a statement. “The Department’s continued efforts to ensure justice for victims of crime is demonstrated through the ongoing Madoff remission process and the billions given back to innocent victims worldwide.”

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“This office continues to seek justice for victims of history’s largest Ponzi scheme,” U.S. Attorney Audrey Strauss for the Southern District of New York said. “The additional payment of more than $568 million by our Office and the U.S. Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section represents the seventh in a series of distributions that will leave victims with compensation for more than 81 percent of their losses. But our work is not yet finished, and the Office’s tireless commitment to compensating the victims who suffered as a result of Madoff’s heinous crimes continues.”

Madoff, who died in prison in April at the age of 82, was responsible for what is believed to be the biggest financial fraud in Wall Street history.

Madoff used his position as chairman of BLMIS to steal billions from his clients, earning him a 150-year sentence.

The money manager was arrested in December 2008 after his business was exposed as a Ponzi scheme, and in March 2009, Madoff pleaded guilty to 11 federal felonies and apologized for his actions.

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Court-appointed trustees have recovered more than $14 billion of an estimated $17.5 billion that investors put into Madoff’s business.

At the time of his arrest, fake account statements were telling clients they had holdings worth $60 billion.

Of the approximately $4.05 billion that will be made available to victims, around $2.2 billion was collected as part of the historic civil forfeiture recovery from the estate of deceased Madoff investor Jeffry Picower, the DOJ said.

In addition, $1.7 billion was collected as part of a deferred prosecution agreement with JPMorgan Chase Bank N.A. and civilly forfeited in a parallel action.

The remaining money was collected via a civil forfeiture action against investor Carl Shapiro and his family and from civil and criminal forfeiture actions against Bernard L. Madoff, Peter B. Madoff and co-conspirators.

“The MVF’s payouts would not have been possible without the extraordinary efforts of the Criminal Division’s Money Laundering and Asset Recovery Section, the U.S. Attorney’s Office for the Southern District of New York and the FBI in the prosecution of Madoff’s crimes and the recovery of assets supporting the forfeiture in this case,” the department said.

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