Trustee Irving Picard has been collecting funds for victims of the elaborate fraud, and is seeking court approval to pay out another $322 million, in what would be the 5th and smallest payment since the dramatic end to the scheme 6 years ago. Although it would be dwarfed by previous payouts, it would bring the total to over $7 billion, which Picard has called an “important milestone.”
Madoff’s ponzi scheme: Surprising levels of recovery
Picard announced earlier this year that it had recovered over $10 billion for investors, far more than anyone had predicted would be possible. That figure has now reportedly reached $10.5 billion, the equivalent of 59 cents on the dollar of principal investment.
There remains around $3.5 billion being held in reserve due to pending court cases, with some victims holding out for interest payments on their investments. The expected payout will push the total given back to investors to over 50% of total claims, with claims of under $963,500 already having been fully paid.
Despite the surprising success in recovering investors’ initial investments, they were expecting far more before Madoff’s scheme collapsed. The trader had been making fictitious trades for years, and claimed to have client accounts containing $65 billion when the facade came crashing down in 2008.
Madoff had told investors that the fund returned around 10% annually, but this was based on bogus trades. Following a lengthy investigation, 76-year old Madoff is currently serving a 150-year sentence in North Carolina.
High hopes for further repayments
The proposed payment will be evaluated in court on January 15, and there is hope that even more funds can be recovered. Chief counsel David Sheehan stated that Picard will continue to work for the benefit of investors: “We remain dedicated to our primary goal, to recover the maximum amount possible for the benefit of (Madoff) customers with allowed claims.”
Picard hopes to recover more funds through further lawsuits and settlements. So far the company has been paid over $1 billion in fees by the Securities Investor Protection Corporation. Some victims have complained about the distribution of recovered funds, and many lawsuits are ongoing.