Madoff scam victims have been repaid more than $530M, but trustee pegs their losses at $21.2B
By Tom Hays, APWednesday, October 28, 2009
Authorities say $530M-plus paid to Madoff victims
NEW YORK — Bernard Madoff’s victims have so far received $530 million in compensation — a record for a securities industry group providing the money, but only a fraction of what they lost in the disgraced financier’s epic swindle.
The total being paid by the Securities Investors Protection Corp., also known as the SIPC, was announced Wednesday during a telephone briefing about the ongoing liquidation of the jailed money manager’s assets and the processing of thousands of claims from burned investors.
Stephen Harbeck, president of the SIPC, said the $530 million exceeded the combined amount from 321 previous brokerage liquidations since 1970. SIPC is authorized by Congress to guarantee brokerage accounts for a maximum $500,000.
On the same call, court-appointed trustee Irving Picard said he had identified $21.2 billion losses in about 2,300 customer accounts. He also said he had approved $4.4 billion in claims, and located about $1.5 billion in assets that will help cover a portion of them.
“We have made significant headway in recent months … under what have been very challenging circumstances,” Picard said.
Madoff, 71, pleaded guilty earlier this year to charges that his secretive investment advisory operation was a multibillion-dollar Ponzi scheme. The former Nasdaq chairman was sentenced to 150 years in prison.
The trustee has sued Madoff’s family members and wealthy associates in bankruptcy court in Manhattan, claiming they made off with billions of dollars that should be returned to his clients. Among the defendants was Jeffry Picower, who drowned Sunday in a swimming pool after having a heart attack.
A complaint filed in May accused Picower — a Florida philanthropist and friend of Madoff for decades — of being the biggest beneficiary of the fraud. It said he made $7 million through “implausibly high purported returns” — an allegation he had denied.
Picower’s death “is certainly tragic,” the trustee said. “No one would have expected it. Having said that, we will continue with the litigation.”
