Feds recover $7.2-billion from Madoff ponzi fraud
December 17, 2010
[ChattahBox US News] – Efforts to redress the staggering losses caused by Bernie Madoff’s infamous Ponzi scheme received an unexpected bonus on Friday when Barbara Picower, the widow of one of the scheme’s largest beneficiaries agreed to return $7.2-billion.
The money, which comprises the largest single forfeiture in U.S history was collected over the course of 35-years by billionaire Jeffry Picower, who died of a heart attack in October of 2009. And his widow is being praised for her decision to return the ill-gotten gains.
“Barbara Picower has done the right thing,” Preet Bharara, U.S. attorney for the Southern District of New York told CNN. “I commend her for agreeing to return this staggering sum, which was other people’s money.”
This single repayment also constitutes more than one-third of the estimated $20-billion lost to Madoff’s elaborate fraud.
“The settlement honors what Jeffry would have wanted, which is to return this money so it can go directly to the victims of Madoff,” said Picower in a statement.
But Irving Picard, the court-appointed trustee in the case, disagrees; In court papers filed just before Mr. Picower died he insists the late philanthropist “knew or should have known he was profiting from fraud, because of the highly implausible rates of return.”
Mrs. Picower still denies such allegations;
“I am confident my husband was in no way complicit in Madoff’s fraud, and want to underscore that neither the trustee nor the attorney has charged him with illegal conduct,” her statement reads.
Since the scheme was uncovered in 2008 over 16,000 people have applied for reimbursement, claiming they were among Madoff’s victims. The vast majority were rejected outright, but over 2,300 claims were identified as legitimate; representing a collective loss of nearly $5.9 billion.
The Securities Investor Protection Corporation will redress $768-million of the loss, while those fleeced of the remaining $5.1 billion will receive at least partial compensation from recovered assets, such as those surrendered by the Picowers.
Mr. Picard has also sued over 400 people who received huge profits from Madoff. Many have flatly refused to return any part of their bounty, claiming they were told it was legitimate profits.
Until its inexorable collapse in December of 2008 the 71-year old Madoff ran the massive Ponzi scheme from the plush ambit of his Manhattan office. More than 4,800 people were investors at some point, and authorities say the deviant plot grossed over $64-billion.
Mr. Madoff was tried and found guilty in March 2009, and is now serving a 150-year sentence at the Butner Federal Correctional Complex in North Carolina. He is currently due for release on November 14, 2139.