Madoff victim fund covers most of Ponzi scheme’s losses: DOJ

The 10th and final distribution from a fund for victims of late Ponzi kingpin Bernie Madoff began Monday, Ministry of Justice said.

The final payout, of more than $131 million, is being sent to more than 23,000 victims worldwide. When completed, more than $4.3 billion will have been distributed by the fund to more than 40,000 victims in nearly 130 countries, the DOJ said.

That figure is nearly 94% of the estimated total losses from the scam, the department said.

The final payment of Madoff Victim Fund was announced some 16 years after Madoff’s fraud came to light.

“Today’s distribution represents an unprecedented conclusion of restitution to victims of civil forfeiture cases related to the Madoff scheme,” said James Dennehy, FBI New York Field Office Assistant Director.

“These victims implicitly trusted Madoff with their investments to ultimately lose significant money to his selfish scheme,” Dennehy said.

Madoff, who headed Bernard L. Madoff Investment Securities in New York, pleaded guilty in March 2009 to 11 felonies related to what federal prosecutors have said was the largest Ponzi scheme in the world.

Madoff was sentenced to 150 years in prison for the fraud, which spanned four decades and involved him paying off clients with money collected from other clients, not with investment gains, as he claimed.

He died in April 2021, aged 82, at a federal penitentiary in North Carolina, nearly a year after he was denied a request for release due to end-stage kidney disease.

When Madoff’s fraud first became public knowledge, prosecutors estimated the total loss at $65 billion. But it’s beautiful fell sharply as authorities deducted the amount of phantom investment gains and interest that Madoff’s clients were tricked into believing existed.

The largest portion of the fund for Madoff’s victims, about $2.2 billion, came from a civil forfeiture recovery from the estate of Jeffry Picower, a now-deceased Madoff investor, the DOJ said.

Another $1.7 billion came from JPMorgan Chase as part of a agreement on deferred prosecution with the DOJ in January 2014. JPMorgan Chase and its predecessor institutions had served as the primary bank through which Madoff ran his scheme, the DOJ has previously said.

The rest of the victim fund came from a “civil forfeiture action against investor Carl Shapiro and his family and from civil and criminal forfeiture actions against Bernard L. Madoff, Peter B. Madoff and their co-conspirators,” the DOJ said Monday.