Madoff victim fund covers most of Ponzi scheme losses: DOJ

The 10th is the final distribution from a fund for the victims of the late Ponzi scheme king Bernie Madoff starting on Monday, the Department of Justice he said.

The latest refund, of more than $131 million, is sent to more than 23,000 victims worldwide. When complete, more than $4.3 billion will be distributed from the fund to more than 40,000 victims in nearly 130 countries, the DOJ said.

This account is almost 94% of the estimated total losses from the scam, the department said.

The final disbursement from the Madoff Victim Fund it was announced some 16 years after Madoff’s fraud came to light.

“Today’s distribution represents an unprecedented conclusion of victim compensation from civil forfeiture actions related to the Madoff scheme,” said James Dennehy, Assistant Director of the FBI’s New York office.

“These victims implicitly trusted Madoff with their investments only to ultimately lose significant money to his selfish plan,” Dennehy said.

Madoff, who was head of Bernard L. Madoff Investment Securities in New York, pleaded guilty in March 2009 to 11 crimes related to what federal prosecutors said was the largest Ponzi scheme in the world.

Madoff was sentenced to 150 years in prison for the fraud, which spanned four decades and involved him paying clients with money collected from other clients, not with investment business earnings as he claimed.

He dead in April 2021, at the age of 82, in a federal prison in North Carolina, almost a year after he was denied a request for compassionate release due to end-stage kidney disease.

When Madoff’s fraud first became public, prosecutors estimated the total loss at $65 billion. But that estimate drastically dropped once authorities subtracted the amount of phantom investment earnings and interest that Madoff’s clients were tricked into believing existed.

The largest portion of the fund for Madoff victims, about $2.2 billion, came from a civil forfeiture recovery from the estate of Jeffry Picower, a now-deceased Madoff investor, the DOJ said.

Another $1.7 billion came from JPMorgan Chase as part of a deferred prosecution agreement with the DOJ in January 2014. JPMorgan Chase and its predecessor institutions had served as the primary bank through which Madoff operated his scheme, the DOJ previously said.

The rest of the victims’ fund came from 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 his co-conspirators,” the DOJ noted Monday. .