Crime

Madoff recoveries top $10 billion with new settlement

Madoff recoveries top $10 billion
VIDEO0:5300:53
Madoff recoveries top $10 billion

The court-appointed trustee rounding up funds for victims of the epic Madoff Ponzi scheme says the total recovered now tops $10 billion, an amount virtually no one thought possible when the scam collapsed nearly six years ago.

Trustee Irving Picard filed the latest proposed settlement Monday in U.S. Bankruptcy Court in Manhattan. The deal would recover nearly $500 million from two defunct feeder funds in the Cayman Islands.

If approved, the settlement would bring the total recoveries to $10.3 billion, according to a statement released by Picard's office. As of mid-October, according to Picard's website, more than $5.25 billion had already been paid out to victims, with the remainder either tied up in litigation or held in reserve as the claims process plays out.

Read MoreMadoff son's death adds new complication for victims

Based on the estimated $17.5 billion in principal lost in the scam, customers who invested directly with Madoff's firm now stand to recover nearly 60 cents on the dollar, an amount unheard of in most Ponzi schemes, let alone one of this magnitude.

Some customers have done even better. Picard's statement notes that every claim totaling less than $925,000—more than 1,000 in all—has been paid in full.

Bernie Madoff's life at Butner
VIDEO2:0102:01
Bernie Madoff's life at Butner

The latest settlement involves Herald Fund SPC and Primeo Fund, both of which deposited the lion's share of their investors' money with Madoff. As part of the complex settlement agreement, Herald's investors will also stand to recover some of their Madoff-related losses. The fund had claimed $1.6 billion in Madoff-related losses, which Picard has agreed to pay.

"By any measure, the settlement terms are highly advantageous, not only to (Madoff's) direct customers, but also potentially to the indirect investors in the Herald Fund," Oren Warshavsky, Picard's lead attorney in the matter, said in a statement.

Most so-called "indirect" Madoff investorssuch as those who deposited money with feeder fundshave been ineligible for payouts from Picard under the process overseen by the Securities Investor Protection Corporation. A separate $4 billion fund for indirect victims, made up of criminal forfeitures collected by the Justice Department, has been flooded with claims, according to the fund's special master, Richard Breeden, formerly chairman of the SEC.

Breeden said the Madoff Victims Fund received more than 63,000 claims totaling more than $76 billion. While Breeden noted on his website that many of those claims will ultimately be thrown out, they are another indication of the "historically unprecedented" losses the Madoff scam caused.