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Madoff Scheme Victims Get New $568M Distribution

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What You Need to Know

  • The Justice Department has started distributing an additional $568 million to nearly 31,000 victims.
  • The Madoff Victim Fund is headed by former U.S. Securities and Exchange Commission Chair Richard Breedan.
  • Madoff, who pleaded guilty to 11 felonies in 2009, died in prison earlier this year.

The U.S. Justice Department announced Thursday that it had started distributing an additional $568 million to nearly 31,000 victims of Bernard Madoff’s Ponzi scheme, the seventh installment in what prosecutors called the largest payment of forfeited funds in DOJ history.

The new distribution, prosecutors said, will bring overall recovery in the case to over $3.7 billion for investors who trusted Madoff to manage their money. Widely regarded as the largest fraud in U.S. history, the scheme may have taken as much as $65 billion from its victims over the course of more than 30 years.

Prosecutors said that more than half of the approximately $4 billion that will ultimately be returned through the Madoff Victim Fund was collected as part of the civil forfeiture recovery from the estate of deceased investor Jeffry Picower, a major beneficiary of the Ponzi scheme.

Another $1.7 billion came as the result of a deferred prosecution agreement that JPMorgan Chase Bank entered after being charged with violations of the federal Bank Secrecy Act, the Justice Department said.

The latest distribution was announced by the Manhattan U.S. Attorney’s Office and Kenneth Polite Jr., the acting assistant attorney general of the Justice Department’s Criminal Division.

“This distribution provides nearly 31,000 victims additional financial recovery from the egregious crimes committed by Bernard Madoff,” Polite 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.”

Madoff, who pleaded guilty to 11 felonies in 2009, died in prison earlier this year at the age of 82 while serving a 150-year sentence.

A federal judge had refused Madoff’s request for compassionate release last June, saying that the sentence was meant to reflect the “extraordinarily evil” nature of Madoff’s offense.

“Although this was a financial crime, as I observed at sentencing, it was not ‘bloodless.’ Rather, it has taken and continues to take ‘a staggering human toll,’ causing heartache, despair, and even suicide,” the judge wrote at the time.

The Madoff Victim Fund, headed by former U.S. Securities and Exchange Commission chair Richard Breedan, is tasked with distributing money forfeited to the federal government. To date, the fund has distributed more than 170,500 total payments to 39,500 victims, according to its website.

In a statement, Breedan said that the latest distribution included newly approved claims, as well as thousands of victims who were previously subject to payment holds relating to collateral recovery issues.

“Measured by the number of victims paid, this is our largest distribution yet. By dollars, this is our third largest distribution,” he said. “However, by any measure, this is a big step toward completing MVF’s mission of helping renew the lives of Madoff’s victims and delivering the broadest and largest recovery for crime victims ever achieved.”