Picower Settlement Helps Madoff Victims
Some of the victims of Bernie Madoff’s Ponzi scheme will benefit from a recent settlement of claims brought against the estate of Jeffry Picower. The $7.2 billion settlement is the largest single forfeiture in American judicial history.
In her New York Times article about the Jeffry Picower settlement, Deal Recovers $7.2 Billion for Madoff Fraud Victims, Diana B. Henriques lists the total amount now available for compensating Madoff victims at just under $10 billion, approximately half the estimated cash losses in the fraud.
However, Irving H. Picard, the trustee in charge of gathering assets for Madoff’s victims, believes the amount of losses could grow as he continues his negotiations with Madoff’s investors. Picard can sue investors who withdrew money regardless of whether or not they suspected the fraud. Those profits would then be distributed to the investors who lost money in the scheme.
The $7.2 billion payment is part of a global settlement of claims brought against the estate of Jeffry M. Picower, who died in 2009. His widow, Barbara, approved the settlement on behalf of the estate. Mrs. Picower’s attorney stated that she was returning every penny her husband had received from his Madoff accounts. The amount represents the exact difference between how much Picower invested with Mr. Madoff, just under $620 million, and the cash he withdrew from his accounts.
Barbara Picower made a statement that she was absolutely confident [her] husband, Jeffry, was in no way complicit in Madoff’s fraud. No one has charged him with any illegal conduct; however, Picard asserted in his complaint that Picower, an experienced investor, should have recognized Madoff’s fraud. Attorneys for Picower disagreed, pointing out that he wasn’t alone in being fooled. The fraud fooled regulators, hedge fund managers and major accounting firms for years.
The settlement is in two parts. First, the estate will pay $5 billion to settle Picard’s complaint. Then it will pay the Justice Department $2.2 billion to settle civil forfeiture claims. All of the money will go to eligible Madoff victims.
For more information on recent and noteworthy settlements, check out our section on settlements in the news.
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