Bernie Madoff’s victims have now recovered 94% of their losses
Bernie Madoff leaves federal court in March 2009 in New York City. A US government fund created to compensate thousands of people scammed by Madoff is making its final batch of payments.
London (CNN) — A US government fund created to compensate thousands of people scammed by the late Bernie Madoff in history’s biggest Ponzi scheme is making its final batch of payments — and it has now made up nearly all of their losses.
The Madoff Victim Fund has started distributing more than $131.4 million in its 10th and final round of payments, bringing the total amount of compensation — shared among almost 41,000 victims across 127 countries — to $4.3 billion, the US Department of Justice said in a press release on Monday.
That means each victim will receive compensation covering almost 94% of their proven losses, according to the department.
The department noted that this final round of payouts represented “the culmination of a decade of work identifying thousands of victims around the world and unwinding layers of complex financial transactions.”
Madoff orchestrated his colossal $20 billion fraud over many years until his arrest in 2008. The scheme, which had run through his wealth management firm, unraveled during the global financial crisis. A Ponzi scheme works by paying off older investors with the cash from new investors, instead of investing the money and distributing the returns.
Madoff, the former Nasdaq chairman, cheated individuals and organizations, including charities and schools, wreaking havoc on people’s lives. Most victims were relatively small-level investors, according to the department, each losing less than $500,000 in the scam.
The MVF says on its webpage that many accounts of Madoff’s crimes assume incorrectly that the majority of victims “were large institutions and high net-worth individuals.” However, “most of the victims MVF helped were actually small investors, with losses averaging roughly $250,000,” according to the website.
In 2009, Madoff was handed a 150-year prison sentence after pleading guilty to 11 federal felonies, including multiple of counts of fraud. He died, aged 82, in 2021.
The MVF began compensating victims in 2017. The bulk of its funds — about $2.2 billion — came from assets recovered from the estate of the late Jeffry Picower who was a Madoff investor, according to the department.
Some of Madoff’s victims have also received compensation through Irving Picard, a court-appointed trustee in the Madoff case, who has distributed almost $14 billion to former Madoff customers.
Most of the money Picard’s lawyers have collected came through settlements with former investors who withdrew more from Madoff’s firm than they deposited. Even though many of these investors claim to have known nothing of the Ponzi scheme, the trustee is suing them for benefiting from it.
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