Former customers of Bernard Madoff will have recouped nearly $6 billion of their money if a federal bankruptcy judge approves the latest payout request by the trustee liquidating the swindler's firm.
The trustee, New York lawyer Irving Picard, on Tuesday said he is seeking approval to pay out $349 million to fraud victims with 1,080 accounts, with payments ranging from $496 to $77.3 million.
The bulk of the payout comes from Picard's $325 million settlement of claims against JPMorgan Chase & Co, once Madoff's main bank.
Picard said the payout would boost the total amount distributed to Madoff victims above $5.9 billion, including sums advanced by the Securities Investor Protection Corp, which oversees the liquidation of failed brokerages.
"Our commitment is simple: to recover the maximum amount of funds stolen in the Madoff Ponzi scheme and to distribute these funds to their rightful owners as quickly as possible," Picard said in a statement.
The proposed payout was announced the day after a federal jury in New York convicted five former Madoff employees of helping their former boss commit fraud, including by falsifying customer accounts and creating false trades and records.
Madoff, 75, is serving a 150-year prison term after pleading guilty in March 2009 to running a decades-long fraud, which once revealed, shook public confidence and regulators who failed to detect it.
Four days ago, Picard announced that his law firm, Baker & Hostetler, submitted a $39.3 million bill for the work of more than 200 lawyers plus other staff between August and November 2013 to recoup money for victims.
If approved, the amount authorized to be paid to the firm since Bernard L. Madoff Investment Securities LLC failed in December 2008 would surpass a half billion dollars, reaching $519.2 million plus other deferred sums, court records show.
U.S. Bankruptcy Judge Stuart Bernstein in Manhattan, who now oversees the liquidation of Madoff's firm following the death in January of his colleague Burton Lifland, is scheduled to review the payout and fee requests on April 17.
Picard has recouped $9.8 billion for Madoff's victims, more than half of his estimate of $17.5 billion in principal lost. Some of the money has been held back because of litigation challenging Picard's authority to recoup profits and decisions on who deserves to be paid. Picard has deemed just 2,517, or 15 percent, of the 16,519 claims he reviewed as "allowed claims."
A separate $4.05 billion fund set up by the U.S. government and overseen by former U.S. Securities and Exchange Commission Chairman Richard Breeden will pay customers and third parties who lost money.
Photo: Reuters/Shannon Stapleton
