Madoff Trustee to Continue Picower Litigation Despite Death

Trustee Irving Picard, who has so far recovered approximately $1.4 billion related to the Bernie Madoff scandal, will continue with the litigation of Jeffry Picower despite his death, CNBC has learned.

Picard said expects to recover $1.5 billion by year-end, and he placed Madoff's customer losses at $21.2 billion currently.

Picower, who had been accused of making more than $7 billion off the investment schemes of jailed financial manager Bernard Madoff drowned after having a heart attack, authorities said Monday.

The sixty-seven year-old Picower was found at about noon Sunday by his wife, Barbara, at the bottom of a pool at their oceanside mansion. She pulled him from the water with help from a housekeeper. He died a short time later at a nearby hospital.

An autopsy conducted Monday found he suffered a heart attack and drowned, said Dr. Michael Bell, chief medical examiner for Palm Beach County. The death has been ruled accidental, and the heart attack was brought on by heart disease. Toxicology tests are pending.

"Obviously, we won't have results for a couple of weeks but we don't anticipate them showing anything," Bell said. "If they do and it shows something unusual, we will amend the death certificate to reflect that."

Picower had been accused by Madoff investors of being the biggest beneficiary of Madoff's schemes. In a lawsuit to recover Madoff's assets, trustee Irving Picard demanded Picower return more than $7 billion in bogus profits. Picard has said the litigation could continue.

Picower suffered from Parkinson's disease and had "heart-related issues," said family attorney William D. Zabel. He described Picower's health as "poor."

Picower's home and property is worth more than $33 million, according to the county records. He was No. 371 on the 2009 Forbes 400 list of the wealthiest Americans, with a net worth of $1 billion.

Picower and his wife started the Picower Foundation in 1989, which has donated millions of dollars. But after the Madoff scandal broke in December, the Picower foundation, whose assets were managed by Madoff, said it would be forced to close.

Picower had asked that the lawsuit against him be dismissed.

Steven R. Schlesinger, a New York lawyer who represents about 25 Madoff investors, called his death "another tragedy in a string of tragedies surrounding Madoff."

"Only time will tell whether Jeffry Picower was a victim or a villain," Schlesinger said Monday.

While some speculated his death could make it more difficult for suing investors to recoup their money, at least one attorney called it "a minor hiccup in the litigation against him."

"I think it's a tragic event," said Peter Shapiro, a Florida attorney whose firm represents several Madoff investors. "Ultimately, the litigation against his estate will go forward and investors will watch closely on the bankruptcy trustee's efforts with the expectation that there will be a recovery for their benefit."

• Slideshow: A Rogues Gallery of Financial Crime

Madoff is serving a 150-year prison sentence after he admitted losing billions of dollars for thousands of clients over a half-century career that saw him rise to be a Nasdaq chairman. Madoff's attorney, Ira Sorkin, did not respond to a request for comment.

—CNBC's Scott Cohn contributed to this report