NEW YORK -- Victims of Bernard Madoff's epic fraud scheme have been approved for $534.25 million of payments, the trustee trying to recover the imprisoned swindler's assets said.
The sum is roughly one-eighth of the $4.44 billion of allowed claims that the court-appointed trustee Irving Picard has identified, Picard told reporters on a conference call. The trustee said he has determined 2,861 direct customer claims.
Picard, a partner at Baker & Hostetler LLP, is supervising the liquidation of Bernard L. Madoff Investment Securities LLC, home to Madoff's estimated $65 billion Ponzi scheme, and filed many lawsuits to recover what he calls "fictitious profits."
Picard said "there definitely will be further lawsuits," especially within the next nine months, to recover more money.
The trustee estimated he has recovered $1.4 billion of assets to cover claims, and that this amount should be around $1.5 billion by year end.
Holders of about 2,335 accounts at Madoff's firm suffered roughly $21.2 billion of losses, Picard said.
The Securities Investor Protection Corp, a federally chartered agency that supervises the liquidation of brokerages, has made the $534.25 million of distributions on about 1,558 claims, relating to 1,368 customer accounts.
Federal law limits SIPC protection to $500,000, and "so far, the only source of distributed funds is SIPC," the agency's president Stephen Harbeck said on the call.
Harbeck said the $534.25 million of committed advances is more than in the SIPC's 321 prior liquidations combined.
PICOWER RECOVERY EFFORTS CONTINUE
Picard also said he will pursue the recovery of $7.2 billion from the estate of billionaire philanthropist Jeffry Picower, who drowned Sunday in a swimming pool at his Palm Beach, Florida, home following a heart attack.
Picard had accused Picower of withdrawing more than $7.2 billion from Madoff's firm, either directly or through entities he controlled.
"His death is certainly tragic," Picard said. "Having said that, we will continue with the litigation."
On October 2, Picard sued a brother, two sons and a niece of Madoff to recover $198.7 million he said was misappropriated while they were executives at the Madoff brokerage.
Picard is trying to recover money from thousands of account holders he calls "net winners," or those who withdrew more money than they deposited.
He said that of the 4,903 active accounts at Madoff's firm as of December 11, 2008, the day Madoff was arrested, holders of 2,568 accounts received more money than they deposited.
A federal bankruptcy judge is expected in February to consider the validity of Picard's methods in deciding which Madoff clients should have undeserved money "clawed back."
Madoff is serving a 150-year prison sentence in a medium-security federal prison in Butner, North Carolina.
The case is Securities Investor Protection Corp v. Bernard L. Madoff Investment Securities LLC, U.S. Bankruptcy Court, Southern District of New York, No. 08-1789.
© 2023 Newsmax. All rights reserved.