Madoff Victim Fund sends $568 million to 31,000 victims of Ponzi scheme

Rick Steves

Bernard L. Madoff used his position as chairman of BLMIS to steal billions from his clients.

The Madoff Victim Fund (MVF) began its seventh distribution of approximately $568 million in funds forfeited to the U.S. government in connection with the Bernard L. Madoff Investment Securities LLC (BLMIS) fraud scheme.

Coordinated by the Department of Justice, the new round will bring the total distributed to over $3.7 billion to nearly 40,000 victims worldwide.

The $568 million will be sent to nearly 31,000 victims across the globe, bringing their total recovery to 81.35%. The series of payments will eventually return over $4 billion to victims. More than 2,600 victims will receive their first payment from MVF in this distribution.

“This distribution provides nearly 31,000 victims additional financial recovery from the egregious crimes committed by Bernard Madoff. 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”, said Acting Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division.

“This office continues to seek justice for victims of history’s largest Ponzi scheme. The additional payment of more than $568 million by our Office and the U.S. Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section represents the seventh in a series of distributions that will leave victims with compensation for more than 81 percent of their losses. But our work is not yet finished, and the Office’s tireless commitment to compensating the victims who suffered as a result of Madoff’s heinous crimes continues”, said U.S. Attorney Audrey Strauss for the Southern District of New York.

Bernard L. Madoff used his position as chairman of BLMIS to steal billions from his clients, ultimately defaulting on his Ponzi scheme as the subprime crisis pushed the financial system over the cliff.

On March 12, 2009, Madoff pleaded guilty to 11 federal felonies, admitting that he had turned his wealth management business into the world’s largest Ponzi scheme in history.

Of the approximately $4.05 billion that will be made available to victims, approximately $2.2 billion was collected as part of the historic civil forfeiture recovery from the estate of deceased Madoff investor Jeffry Picower.

An additional $1.7 billion was collected as part of a deferred prosecution agreement with JPMorgan Chase Bank N.A. and civilly forfeited in a parallel action.

The remaining funds were collected through a civil forfeiture action against investor Carl Shapiro and his family and from civil and criminal forfeiture actions against Bernard L. Madoff, Peter B. Madoff, and their co-conspirators.

Bernie Madoff was sentenced to 150 years in prison, having died in April this year. His co-conspirator, younger brother Peter Madoff, was sentenced in 2012 to 10 years in prison after pleading guilty to criminal charges that included conspiracy to commit securities fraud for falsifying the books and records of the investment advisory company founded by his brother.

Madoff’s eldest son, Mark, 46, died by suicide in 2010 on the anniversary of his father’s arrest two years prior. He had worked at his father’s trading desk.

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