Feds start returning ill-gotten gains; investors stand to recover 75% of losses
More than eight years after Bernie Madoff pleaded guilty to orchestrating his epic Ponzi scheme, the U.S. Department of Justice today began distributing $772.5 million in recovered funds to the fraud’s 24,000 victims.
“This is the largest restoration of forfeited property in history,” Deputy Attorney General Rod Rosenstein said in a statement. Officials ultimately expect to return more than $4 billion to victims.
Although the amount recovered by the government is considerable, it is less than the nearly $9 billion clawed back by Irving Picard, the New York lawyer who oversaw the liquidation of Madoff’s firm. Between the efforts of Picard and the government, Madoff investors stand to recover about 75% of their $17.5 billion in losses.
Numerous New York movers and shakers invested with Madoff, including the Wilpon family, owners of the Mets, and real estate developer Mort Zuckerman. Many prominent nonprofits also suffered big losses, with Yeshiva University taking a $140 million hit, Hadassah $90 million and the foundation of Elie Wiesel losing $15 million. (Wiesel, the Nobel Peace Prize winner, also lost his life savings.) Ezra Merkin, whose family name graces a West Side concert hall, funneled hundreds of millions of dollars to Madoff.
The victims fund administered by the Justice Department was created in 2012. It got a $1.7 billion cash infusion in 2014 when Madoff’s bank, JPMorgan Chase, settled allegations that it had turned a blind eye to the decades-long fraud.