Just in time for the holidays, the trustee rounding up funds for victims of Bernard Madoff's Ponzi scheme is seeking court approval to return another $322 million. It would be the fifth and smallest payout since the scam blew up around six years ago. Nonetheless, trustee Irving Picard calls the proposed distribution an "important milestone," bringing the total returned to victims to more than $7 billion.
Earlier this year, Picard announced that the total recovered from the scam had topped $10 billion for the first time, an amount virtually no one thought possible when the scandal first broke. Since then, the total has grown to around $10.5 billion, or around 59 cents on the dollar of the investors' principal. The remaining funds are being held in reserve because of pending litigation, including claims by some victims that they should also be entitled to some interest on their investments.
With this latest distribution, Picard will have paid nearly half the total amount claimed, according to a statement by his office. Claims totaling $963,500 and less have already been paid in full.
Of course, the recoveries do not bring the victims anywhere close to the money they thought they were making through their investments with Madoff, who confessed to fabricating trades for years. The firm claimed to have had as much as $65 billion in its client accounts at the time it imploded in 2008, but that figure included fictitious profits; Madoff had claimed his funds had returns of around 10 percent a year for many years.
Madoff, 76, is serving a 150-year sentence at a medium-security federal prison in North Carolina.
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Picard has collected a little over $1 billion in fees paid by the Securities Investor Protection Corporation, which is overseeing the process. His chief counsel, David Sheehan, says they still hope to recover more money for investors through additional lawsuits and settlements.
"We remain dedicated to our primary goal," Sheehan said in a statement, "to recover the maximum amount possible for the benefit of (Madoff) customers with allowed claims."
A hearing on the new payout is scheduled for Jan. 15.