More money returned to Madoff victims, total nears $6 billion

Bernard Madoff leaves federal court in New York on Tuesday, March 10, 2009.
Jin Lee | Bloomberg | Getty Images

The trustee liquidating Bernard Madoff's firm on Monday began distributing another $351.6 million to the swindler's former customers, boosting the amount recouped to nearly $6 billion.

Irving Picard, the trustee, said the fourth interim payout will go to victims of the Ponzi scheme who had 1,081 accounts at Bernard L Madoff Investment Securities. Payments range from about $500 to about $77.8 million and average $325,000.

Most of the payout comes from a $325 million settlement of Picard's claims against JPMorgan Chase, which had been Madoff's main bank for more than two decades.

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Claimants will receive 3.18 percent of what they are owed, unless their claims have been fully paid off, Picard said.

With the latest distribution, Picard will have distributed about $5.95 billion to Madoff victims. This includes $812.2 million advanced by the Securities Investor Protection, which oversees the liquidation of failed brokerages.

Of the 2,518 claims that Picard deemed were allowed, 1,129 will be fully satisfied following the latest distribution, including all claimants seeking to recoup $925,000 or less.

Picard said he is "looking ahead to additional, significant recoveries and distributions later this year."

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The trustee has recouped $9.8 billion, roughly 56 percent of the $17.5 billion in principal he said was lost by those who submitted claims.

Some of the money has been held back because of litigation challenging Picard's authority and decisions.

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Madoff, who turned 76 last week, is serving a 150-year prison term after pleading guilty in March 2009, three months after his arrest.

A federal jury in Manhattan in March convicted five former Madoff employees of helping their former boss commit fraud.

The U.S. government has a separate $4.05 billion fund to pay customers and third parties who lost money with Madoff. Former U.S. Securities and Exchange Commission Chairman Richard Breeden oversees that fund.

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The deadline to submit claims was April 30.

—By Reuters