According to Richard C. Breeden, who is overseeing the US Department of Justice’s Madoff Victim Fund, he has received some 51,700 claims worth approximately $40 billion from Ponzi scam victims seeking to recover their losses. That amount is three times more than the claims submitted during the bankruptcy proceedings for Bernard L. Madoff’s firm.
The fund is responsible for giving back $4 billion in forfeited assets to claimants, including those who were indirectly impacted by the Madoff Ponzi scam, such as ” feeder funds,” banks, hedge funds, and other entities that trustee Irving Picard has denied recovery. Picard is only compensating direct investors who were harmed.
Breeden says that the amount of investors seeking recovery are twice as many as previously estimated and their claimed losses are billions of dollars greater than what was documented. Prior to an April 30 deadline, he received over 43,500 claims from those who did not submit to the bankruptcy case. More than 36,000 claims were from those who said they haven’t gotten any of their losses back.
The investors are from 119 nations. 58% of are U.S. residents. 78% are reporting losses of up to $500,000. Breeden, however, said that he expects to declare a significant number of claims duplicative, ineligible, or inflated.
Meantime, earlier this month Picard said that a fourth distribution of funds would be issued to direct investors who suffered losses. The distribution of $351.6 million will be for claims related to 1,081 accounts held by Bernard L. Madoff Investment Securities at the time of the fraudster’s arrest.
The average payment distribution will be about $325,000, with the largest one, $77.8 million. Picard says he is working to give approved claimants all of their losses back.
In total, Picard has recovered $9.8 billion to repay investors—that’s over half of the $17.5 billion in principal that Picard said was lost by claimants. Over the two decades that he was bilking clients, Madoff kept most of their funds in accounts with JPMorgan Chase (JPM). A majority of this latest distribution is a result of the $325 million settlement reached between JPMorgan Chase (JPM) and Picard over allegations that because the firm was profiting from transaction fees, it purposely chose to ignore signs that Madoff was running a Ponzi scam.
Madoff is serving a 150-year prison term for his scam. His victims ranged from ordinary retail investors to the rich and famous.
In other Madoff Ponzi scam-related news, five of his formers staffers who were found guilty in March of helping him perpetuate the fraud want an acquittal or a retrial. They contend that false testimony from government witnesses and flawed jury proceedings were factors in their convictions.
The defendants are ex-Madoff operations chief Daniel Bonventre, account manager Joann Crupi, and secretary Annette Bongiorno, who were convicted on tax evation and securities fraud charges, and computer programmers George Perez and Jerome O’Hara, who were convicted on fraud charges. They are facing a maximum of 78 to 220 years in prison.
If you suspect you were the victim of a Ponzi scam, contact our securities fraud lawyers today.
Another $350M Heading Back to Madoff Victims, Fox Business, May 5, 2014
Investors seek over $40 billion from Madoff victim fund, Reuters, May 13, 2014
Madoff Fraud Claims Swell, The Wall Street Journal, May 13, 2014
More Blog Posts:
Madoff Ponzi Scam: Five Ex-Aides Convicted of Securities Fraud,Victims to Recover $349 Million,, Stockbroker Fraud Blog, March 26, 2014
Madoff Ponzi Scam Victims Win Right to Appeal for Interest, Stockbroker Fraud Blog, March, January 24, 2014
US Supreme Court Hears Oral Argument on the Impact of SLUSA on the Stanford Ponzi Scams, Institutional Investor Securities Blog, October 17, 2013