The majority of investors in the infamous Bernie Madoff Ponzi scheme, the largest financial crime in American history, can now expect to recover their investments. In 2009, under an elaborate Ponzi scheme, Madoff lost approximately $50 billion of his investors’ money before pleading guilty to 11 federal counts, including securities fraud.
Irving Picard, the court-appointed trustee for the liquidation of Madoff’s fraudulent business, filed a motion with New York City bankruptcy court to distribute an additional $1.5 billion to investors – this on top of more than $7.6 billion paid to date. If the motion is approved, victims with losses up to $1,161,193.87, comprising roughly 54 percent of all victims, will be made whole.
Those who invested more than that amount can expect to receive back about 61 percent of their additional investments, which Steven Harbeck, President and CEO of the Securities Investors Protection Corporation (SIPC), touted as a “major victory.”
Several billion more of the $11 billion collected still awaits payout as various legal battles continue. The widow of Jeffrey Picower, one of the largest investors and beneficiaries of the scheme, voluntarily turned over more than $7 billion of this projected payout. Lawyers for the trustee estimate that an additional $3 to $4 billion in the $65 billion scheme may still be recoverable, nearly covering all of the $17.5 billion in principal lost.
The proposed payout is not without controversy. Fraud victims have taken issue with Picard’s proposed formulas. Picard’s recent motion came about after the resolution of the latest legal struggle between the trustee and some of the victims. The victims argued that
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