London –
A US government fund created to compensate thousands of people defrauded by the late Bernie Madoff in the largest Ponzi scheme in history is making its latest batch of payments, and has already offset almost all of its losses.
The Madoff Victims Fund has begun distributing more than $131.4 million in its 10th and final round of payments, bringing the total compensation amount (distributed to nearly 41,000 victims in 127 countries) to $4.3 billion. dollars, the United States Department of Justice said in a statement. Monday press release.
That means each victim will receive compensation that will cover nearly 94 percent of their proven losses, according to the department.
The department noted that this final round of payments represented “the culmination of a decade of work identifying thousands of victims around the world and untangling layers of complex financial transactions.”
Madoff orchestrated his colossal $20 billion fraud over many years until his arrest in 2008. The scheme, which had operated through his wealth management company, unraveled during the global financial crisis. A Ponzi scheme works by paying older investors with cash from new investors, rather than investing the money and distributing the returns.
Madoff, former chairman of Nasdaq, deceived people and organizations, including charities and schools, wreaking havoc on people’s lives. Most of the victims were relatively small-level investors, according to the department, and each lost less than $500,000 in the scam.
The MVF says on its website that many accounts of Madoff’s crimes incorrectly assume that most of the victims “were large institutions and high-net-worth individuals.” However, “most of the victims MVF helped were actually small investors, with average losses of approximately $250,000,” according to the website.
In 2009, Madoff received a 150-year prison sentence after pleading guilty to 11 federal crimes, including multiple counts of fraud. He died, aged 82, in 2021.
The MVF began compensating victims in 2017. Most of its funds — about $2.2 billion — came from assets recovered from the estate of the late Jeffry Picower, who was a Madoff investor, according to the department.
Some of Madoff’s victims have also received compensation through Irving Picard, a court-appointed trustee in the Madoff case, who has distributed nearly $14 billion to former Madoff clients.
Most of the money Picard’s lawyers have raised came from settlements with former investors who withdrew more from Madoff’s firm than they deposited. Although many of these investors claim to know nothing about the Ponzi scheme, the administrator is suing them for profiting from it.
