Bankruptcy judge approves first payouts to Madoff victims

[JURIST] Judge Burton Lifland of the US Bankruptcy Court for the Southern District of New York [official website] approved the first settlement payments to victims of the $65 billion Bernard Madoff [JURIST news archive] Ponzi scheme, sending payments of approximately $200,000 to 1,224 claimants on Tuesday. Lifland also authorized a fund [Bloomberg report] to hold $2.6 billion until various appeals are completed. Trustee Irving Picard [official website] has regained more than $7.6 billion from the Madoff estate. In May, Picard released his fifth interim report [text, PDF], stating he has filed "over one thousand lawsuits to recover avoidable transfers and other monies in claimed amounts totaling over $90 billion for the benefit of the Bernard L Madoff Investment Securities LLC [BLIMIS] estate." The report also states that there have been 16,518 customer claims of which 2,409 claims will receive compensation.

In January, Lifland approved a settlement [JURIST report] with the estate of Jeffry Picower, a friend and investor of fraudulent financier Madoff. As part of the approved settlement, Picower's widow, Barbara, agreed to forfeit $7.2 billion to Picard [LAT report] to be returned to victims of the multi-billion dollar Ponzi scheme. Barbara Picower agreed to return all profits received from the Madoff firm but insists that her husband was unaware of Madoff's fraudulent activities and was never charged with a crime. The month before, Picard filed close to 60 lawsuits in an attempt to recover more than $40 billion [JURIST report] from numerous banks, hedge funds and individuals, coinciding with the two-year deadline for seeking compensation. In November 2009, David Friehling, former outside accountant for Madoff, pleaded guilty to fraud charges [JURIST report] in the US District Court for the Southern District of New York, but denied knowledge of Madoff's Ponzi scheme. In June 2009, Madoff was sentenced to 150 years in prison [JURIST report] on securities fraud charges stemming from his multi-billion dollar Ponzi scheme, the largest in US history.

 

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