Total given to Madoff scheme victims reaches $4B: DOJ

Total given to Madoff scheme victims reaches $4B: DOJ
Bernie Madoff. The Department of Justice announced that the Madoff Victim Fund has begun its eighth disbursement of about $372 million in connection with the Bernard L. Madoff Investment Securities LLC fraud scheme. (Photo courtesy of Wikimedia Commons)

The Madoff Victim Fund has begun its eighth distribution of approximately $372 million in connection with the fraud scheme perpetrated by Bernard L. Madoff , the Department of Justice announced.

Madoff, a former Roslyn resident, orchestrated the greatest Ponzi scheme in American financial history, costing investors $18 billion.

The fund will make payments to 27,219 victims worldwide as part of this distribution. Over 40,000 people have received compensation of more than $4 billion for damages.

“The Criminal Division is proud to continue providing compensation to victims through the largest remission process the Department has overseen,” said Assistant Attorney General Kenneth Polite, Jr. of the Justice Department’s Criminal Division. “The billions distributed worldwide is a testament to the department’s sustained efforts to ensure justice for the victims of Bernard Madoff’s massive fraud.”

Madoff used his influence to defraud his clients of billions and pleaded guilty to 11 federal charges in 2009. A U.S. District Judge gave him a 150-year jail sentence on June 29, 2009. He died in April 2021.

Madoff’s sons, Andrew and Mark, who grew up in Roslyn, were also active in the firm. They informed authorities about their father’s crimes in 2008. They have both died since then: Andrew in 2014 from mantle cell lymphoma and Mark in 2010 by suicide.

The Wilpon family, then owners of the New York Mets, was among those affected. Other victims included the North Shore-Long Island Jewish Health System, later absorbed into Northwell Health as well as the Elie Wiesel Foundation for Humanity.

U.S. Attorney Damian Williams for the Southern District of New York said the Department of Justice’s work for rectitude will continue.

“Today’s additional payments of $372 million by this Office and the Criminal Division’s Money Laundering and Asset Recovery Section represents the eighth in a series of distributions that will leave victims with compensation for more than 88 percent of their losses — a truly remarkable result,” he said. “But our work is not fully complete, and this Office’s tireless commitment to compensating the victims who suffered as a result of Madoff’s crimes continues.”

About $2.2 billion of the funds distributed to victims came from the civil forfeiture recovery achieved from the estate of deceased Madoff investor Jeffry Picower. A parallel lawsuit resulted in an extra $1.7 billion, which was also collected as part of a deferred prosecution deal with JPMorgan Chase Bank N.A.

The rest of the money was obtained through civil forfeiture proceedings against investor Carl Shapiro and his family as well as through criminal and civil forfeiture proceedings against Bernard L. Madoff, Peter B. Madoff and their accomplices.

The Queens-born Madoff, a Hofstra University graduate, was once seen as a prodigy. At 22, he started his own firm. The former chairman of Nasdaq also facilitated the switch from analog to electronic trading.

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