Law EnforcementDecember 19, 2023

Madoff Victim Fund to Pay Out $158.9M to Fraud Victims

The ninth distribution brings the total recovery to more than $4.2 billion over the past 10 years.

Reported by Michael Katz

The Madoff Victim Fund has begun paying out $158.9 million to nearly 25,000 investors who lost money from Bernie Madoff’s $65 billion Ponzi scheme. It is the fund’s ninth distribution, raising the total restitution to more than $4.22 billion

The Madoff Victim Fund, established by the Department of Justice in 2013, has now collected and distributed to nearly 41,000 investors more than 91% of their losses, according to the DOJ and the MVF.

“The department’s Madoff Victim Fund has exceeded expectations in the level of recovery provided to victims of the fraud committed by Bernard Madoff, which devastated thousands of lives,” Nicole Argentieri, acting assistant attorney general of the DOJ’s Criminal Division, said in a release. “The department continues to prioritize the use of civil asset forfeiture to ensure compensation is available for victims of fraud.”

In 2009, Madoff pleaded guilty to 11 felonies related to the Ponzi scheme and was sentenced to 150 years in prison. The MVF, which has evaluated more than 68,000 remission petitions, is overseen by Richard Breeden, former chairman of the Securities and Exchange Commission, who was appointed special master by the Department of Justice.

Approximately $2.2 billion of the total funds distributed to victims came from the civil forfeiture recovery from the estate of Jeffry Picower, a deceased Madoff investor. Another $1.7 billion was collected as part of a deferred prosecution agreement with JPMorgan Chase Bank and civilly forfeited in a parallel action. The rest was collected through a civil forfeiture action against investor Carl Shapiro and his family and from civil and criminal forfeiture actions against Bernie Madoff, Peter Madoff and their co-conspirators.

Meanwhile, Irving Picard, who in 2008 was named trustee for the liquidation of Bernard L. Madoff Investment Securities, this month filed a motion with a federal bankruptcy court in New York seeking approval to allocate more than $66 million in recoveries to the BLMIS Customer Fund. Like the MVF, the BLMIS Customer Fund, established under the Securities Investor Protection Act, was also created to recover investor losses caused by Madoff’s fraud.

Picard is also seeking authorization for a 15th distribution from the Customer Fund, of more than $45 million, which he said would increase the amount distributed to more than $14 billion. The court set a January 24 hearing date for the motion.

“On the 15th anniversary of the uncovering of the largest Ponzi scheme in history, the SIPA Trustee and his legal team, with the support of the SIPC legal team, continue to achieve remarkable results in their efforts to recover stolen Madoff customer funds,” said Josephine Wang, president and CEO of the Securities Investor Protection Corp.