A Drop in the Bucket: Madoff Victims Paid Just $534 Million
Only $534 million has been approved as payment to victims of convicted Ponzi schemer Bernard Madoff, who is serving life in prison after admitting he ripped off thousands of investors to the tune of about $65 billion, officials said.
Irving Picard, the court-appointed trustee overseeing claims against Madoffâ€™s former financial empire, said the amount to be paid represents just one-eighth of the $4.4 billion in allowed claims which have been identified. More than 2,800 former Madoff clients have filed direct customer reimbursement claims involving Madoffâ€™s scheme, Picard said.
Those clients lost a total of about $21.2 billion, Picard said, according to a Reuters news report.
Picard estimates there will be many more lawsuits filed by former clients seeking reimbursement for losses in Madoffâ€™s con job. Earlier this month, two Madoff victims who lost $2.4 million in the scheme sued the Securities and Exchange Commission blaming the agency for failing to detect it and stop it. Other lawsuits against the SEC and others involved in the Madoff debacle are sure to come, officials say.
The trustee has already recovered $1.4 billion in assets from Madoff, including the money managerâ€™s luxury homes, yachts, and other holdings, Picard told reporters today.
The money to be paid to Madoffâ€™s victims will come from the Securities Investor Protection Corp, a fund established to reimburse investors who lose money in failed brokerages. Individual investors can receive up to $500,000 from the fund, which in Madoffâ€™s case means many people will receive far less back than they lost in the pyramid scheme.
Madoff came forward in December 2008 to admit he had duped investors into believing he was managing their money and earning them returns on their investments. In reality, the entire business was a scam, a so-called Ponzi scheme in which early investors were paid purported â€œprofitsâ€ from funds contributed by later investors.
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