Payouts from a $4billion fund for Bernie Madoff’s victims are expected to begin this year, ending their nearly nine-year wait to begin recouping losses from his Ponzi scheme.
Recipents of the payouts from the government fund are 35,508 Madoff victims whose total losses exceeded $6.5billion.
Nearly all had invested indirectly with Madoff, such as through ‘feeder funds,’ and roughly three-quarters have received nothing since the Ponzi scheme was uncovered in December 2008.
Madoff is the admitted operator of a Ponzi scheme that is considered the largest financial fraud in U.S. history.
Bernie Madoff is the admitted operator of a Ponzi scheme uncovered in 2008 that is considered the largest financial fraud in U.S. history
Madoff is pictured above in a mug shot from March 2009. Prosecutors estimated the size of the fraud to be $64.8billion based on the amounts in the accounts of Madoff’s 4,800 clients
Prosecutors estimated the size of the fraud to be $64.8billion, based on the amounts in the accounts of Madoff’s 4,800 clients as of November 30, 2008.
If the 2008 financial crisis had never happened, it’s possible that Madoff would still be running the operation.
When Madoff’s customers started to panic in the fall of 2008, they began withdrawing hundreds of millions of dollars at a time, thirsty for that liquidity. Madoff could only give back so much before it all dried up.
A Ponzi scheme is an investment operation wherein the operator generates returns for older investors through revenue paid by new investors, rather than from legitimate business activities or profit of financial trading.
If the 2008 financial crisis had never happened, it’s possible that Madoff would still be running the operation. Madoff, 79, is serving a 150-year prison term
In a letter made public on Wednesday, the U.S. Department of Justice said it ‘recently notified victims whose petitions have been approved and is poised to issue initial distributions from the Assets Forfeiture Fund by the end of 2017.’
The undated letter by Assistant Attorney General Stephen Boyd was addressed to Florida Congressman Vern Buchanan, who had complained to the Justice Department about payout delays.
Buchanan’s district is on Florida’s Gulf coast.
A court-appointed trustee liquidating Bernard L. Madoff Investment Securities LLC, Irving Picard, has recouped about $12 billion for Madoff customers, and is awaiting court approval for an additional $687 million payout.
Indirect investors are ineligible to recover from the liquidation.
Madoff, 79, is serving a 150-year prison term.
The scandal nearly ruined his family.
His wife Ruth continued to visit her husband in prison and talk to him regularly until their son Mark’s suicide
Madoff’s wife Ruth has a 989-sq-ft condominium in Connecticut, and is living off the $2.5million that federal prosecutors granted her in exchange for forfeiting every other asset
Both of Madoff’s sons are dead, and his five grandchildren have all changed their last name in an attempt to escape the family’s shame
On the second anniversary of his father’s arrest, Mark Madoff hanged himself at his apartment in New York City.
‘[He was] an innocent victim of his father’s monstrous crime,’ Mark’s lawyer said in a statement.
Madoff’s other son Andrew died from a resurgence of his lymphoma in 2014.
His wife Ruth continued to visit her husband in prison and talk to him regularly until Mark’s suicide.
Ruth now lives alone in Old Greenwich, CT, in a 989-square-foot condominium.
She is living off the $2.5million that federal prosecutors granted her in exchange for forfeiting every single other asset.
She must report any purchase she makes over $100 to a bankruptcy trustee.
The Madoffs’ five grandchildren have all changed their last name in an attempt to escape the family’s shame.