Wednesday, October 4, 2023
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Madoff Investor’s Estate|Returns $7.2B for Victims

MANHATTAN (CN) - "Every penny" of a $7.2 billion settlement for victims of the Bernard Madoff's "deplorable" Ponzi scheme was recovered, federal prosecutors said Friday, announcing the largest single forfeiture in U.S. history.

Authorities will recover $7.2 billion from the estate of Madoff's friend and investor Jeffry Picower, who died last October, according to a federal court settlement agreement.

By the time the fraud was revealed, Picower had actually profited from approximately 30 years of investments with Bernard L. Madoff Investment Securities since he withdrew more money than he invested.

At a press conference downtown, Manhattan U.S. Attorney Preet Bharara called the figure "a truly staggering sum that really represents other people's money" as well as "the largest single forfeiture recovery in U.S. history" by the Justice Department. He added that victims lost approximately $20 billion in principal.

Irving Pickard, the newly appointed special master in charge of untangling the funds stolen by Madoff, anticipates that recovered money will be distributed to victims by the first quarter of 2011.

"As of today, we have jointly recovered nearly 50 percent of the currently estimated losses, and I emphasize 'currently estimated losses,'" Picard said at the press conference.

Picard credited his successes with an emphasis on "negotiating rather than litigating" and said he was hopeful that settlements "can and will be repeated."

FBI Assistant Director-in-Charge Janice Fedarcyk noted that for the victims of the fraud, "justice consists not just of restitution but criminal investigation of who is responsible."

Investigators emphasized that the criminal actions are ongoing.

"Today, we have indicted 8 people, convicted three of them, and ensured that Madoff ... will spend the rest of his natural life in prison," Bharara said. "We are not shy about bringing charges. There is a difference between civil and criminal [actions]."

Securities Investor Protection chairman Orlan Johnson echoed that sentiment.

"Today, I make my solemn pledge to all of you that we are not finished," Johnson said. "This is a puzzle that has many moving parts."

He added that everyone is working to get money to Madoff's victims "as fast as humanly possible."

"Customer assets are never diminished in any way by paying civic expenses in this case," Johnson said at the press conference. "All goes directly to the victims."

Last week, philanthropist and Madoff investor Carl Shapiro agreed to forfeit $625 million to the fraud victims.

In a hearing on Thursday for Madoff's assistant, Annette Bongiorno, prosecutor Julian Moore said, "The money is constantly moving."

Bharara declined to answer a reporter's question about whether the forfeiture clears Picower's name. The investor was reportedly found dead in a swimming pool in Palm Beach, Fla., in 2009.

Picower's widow, Barbara, released a statement through her attorney emphasizing that Picower was never charged before he died.

"I am absolutely confident that my husband, Jeffry, was in no way complicit in Madoff's fraud," she said in the statement.

"I believe that this settlement honors what Jeffry would have wanted, which is to return this money so that it can go directly to the victims of Madoff," Barbara Picower's statement continues. "I believe that the Madoff Ponzi scheme was deplorable, and I am deeply saddened by the tragic impact it continues to have on the lives of its victims. It is my hope that this settlement will ease that suffering."

The case was brought in coordination with President Barack Obama's Financial Fraud Enforcement Task Force.

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