Madoff Investor’s Estate Forfeits 7.2 Billion Dollars

NEW YORK (AFP) – – Thousands of people who lost money in Bernard Madoff’s Ponzi scheme got good news Friday when the estate of an investor who earned a fortune from the fraud agreed to surrender 7.2 billion dollars.

The money from estate of late Madoff ally Jeffry Picower “is the largest forfeiture recovery in US history,” federal prosecutor Preet Bharara told a press conference.

“The entire 7.2 billion dollars will be distributed to the victims. We expect to distribute the money in the new year,” he added.

Court-appointed trustee Irving Picard is clawing back money from Madoff family members and investors who profited from the decades-long pyramid scheme, or Ponzi fraud, the biggest in Wall Street history.

The big haul from Picower’s estate quadruples the size of the trustee’s fund.

Picower, who made billions as one of Madoff’s top investors, died October 2009 of a heart attack in his Florida swimming pool, just under a year after Madoff was arrested.

His widow, Barbara Picower, said: “It is a great tragedy that my husband Jeffry’s sudden and untimely death last fall prevented him from seeing the timely and full restoration of his reputation for honesty, integrity and professional achievement.

“He was committed to overcoming the devastation resulting from Bernard Madoff’s fraud by reaching a fair and generous settlement with Mr Picard.”

Madoff, serving a 150-year prison sentence, was arrested in December 2008 and pleaded guilty in Manhattan federal court to running a Ponzi scheme that Picard has estimated lost some 20 billion dollars of investors’ money.

Prior to the 7.2 billion haul announced Friday, Picard had recouped some 2.6 billion dollars, partly through confiscation of Madoff family properties and auction of personal belongings.

“The importance of this settlement cannot be overstated, as it shows significant progress in our efforts to assemble the largest customer fund possible,” Picard said in a statement.

“This agreement puts the best interests of the Madoff customers first, is fair and equitable, and avoids time-consuming litigation,” David Sheehan, a lawyer with the trustee, said.

Picower died without having been charged with complicity in Madoff’s scheme. But he had an extraordinarily close relationship with Madoff from at least the 1970s, officials say.

During that relationship, Picower withdrew just over 7.2 billion dollars in profits from the Madoff investment operation.

The settlement requires his widow to give up that fortune, but “contains no finding or admission of fault against Picower,” the prosecutor’s office said.

Madoff’s family, which spent decades living in luxury as a result of Bernard Madoff’s vast theft, was struck by tragedy this month when one of his two sons committed suicide.

Mark Madoff, 46, hanged himself in his Manhattan apartment on the second anniversary of his father’s arrest.

Bernard Madoff chose not to attend any funeral, his lawyer said, although it was not clear whether prison authorities would have granted him permission anyway.

Fearing a media invasion, the family reportedly cremated the son’s body without any formal funeral service.