Victims of imprisoned Bernard Madoff’s Ponzi scheme could be getting back more of their stolen money.
Irving Picard, the trustee in charge of liquidating Madoff’s assets, is asking a New York court for permission to distribute another $1.5 billion to $2.4 billion to investors who lost money in Madoff’s fraudulent investments.
Picard’s job is to recover as much money as possible for the victims, and the process has been arduous. Ever since Madoff’s firm collapsed, more than three and a half years ago, the victims who are trying to get their money back have filed lawsuits and made other complaints over how Picard has chosen to distribute the money.
Picard estimates he has recovered $9.1 billion, but has been able to distribute only $1.1 billion.
He called his request to distribute more money, filed with bankruptcy court for the Southern District of New York, “another major milestone in the worldwide Madoff recovery effort.”
Two recent developments have made more funds available for distribution. In June, the Supreme Court declined to hear the objections of victims who protested Picard’s formula for determining how much money victims should get. Picard had argued that investors should get back only on their losses. Investors who had made money with Madoff thought they should be able to get back more.
Picard called the Supreme Court’s decision “great news” for investors waiting to get their money back.
Another development this month helped, when an extra $5 billion moved to the victims’ fund. It came from a settlement with the estate of a businessman who benefited from Madoff’s fraud.
But more challenges remain. For example, some victims think Picard should factor inflation and interest when determining the value of their investments. Picard disagrees.
In a statement, Picard’s chief counsel, David Sheehan, said that more money could be released to victims if they would drop such objections.