Over $488 million will be further distributed to 37,000 victims of former Roslyn resident Bernard Madoff’s financial crimes, the Department of Justice announced Thursday.
Madoff, 82, who organized the largest Ponzi scheme in U.S. financial history and lost $18 billion for investors in his Bernard L. Madoff Investment Securities firm, has been held in a federal prison in Butler, N.C., since he pleaded guilty to 11 counts of financial crimes in 2009. The list of his wrongdoings included fraud, money laundering, perjury, and theft. He was sentenced to 150 years in prison and ordered to forfeit $170,799,000,000 as part of his sentence.
Acting Manhattan U.S. Attorney Audrey Strauss said in a statement that the payments represent the sixth in a series of distributions that will leave victims with compensation for more than 80 percent of their losses.
Assistant Attorney General Brian C. Rabbitt added that the department had now returned nearly $3.2 billion to Madoff’s victims, recovering more than 80 percent of the losses.
“This exceptional work – and there is more to come – has been made possible by the department’s steadfast commitment to the pursuit of the proceeds of fraud through civil forfeiture,” Rabbitt said.
Strauss, Rabbitt and William F. Sweeney Jr., the assistant director-in-charge of the New York Field Division of the Federal Bureau of Investigation announced that the Madoff Victim Fund would conduct the distribution.
The fund ultimately plans to return more than $4 billion in assets that have been recovered as compensation for losses suffered by the collapse of Madoff’s firm, following the largest fraud in history. Another $5 billion in assets recovered by the U.S. Attorney’s Office are being separately paid to Madoff victims through the BLMIS Customer Fund administered by the Securities Investor Protection Act Trustee.
The Madoff Victim Fund is funded through recoveries by the U.S. Attorney’s Office in various criminal and civil forfeiture actions and is overseen by Richard Breeden, the former Chairman of the United States Securities and Exchange Commission, in his capacity as Special Master appointed by the Department of Justice to assist in connection with the victim remission proceedings.
Of the approximately $4.05 billion that will be made available to victims through the Madoff Victim Fund, approximately $2.2 billion was collected as part of the civil forfeiture recovery from the estate of deceased Madoff investor Jeffry Picower.
An additional $1.7 billion was collected as part of a deferred prosecution agreement with J.P. Morgan-Chase Bank N.A. for Madoff-related Bank Secrecy Act violations. Additional funds were collected through criminal and civil forfeiture actions against Madoff and his co-conspirators, and certain Madoff investors.
Richard C. Breeden, who serves as special master of the Madoff Victim Fund, spoke excitedly about the recovery in a statement.
“[The fund] is delighted to be able to bring recoveries for more than 30,000 Madoff victims to slightly over 80% — a milestone we have worked long and hard to achieve,” Breeden said. “This is MVF’s sixth distribution overall, and our second during the global pandemic. Every distribution to the Madoff victims is important, but we are really thrilled to be able to deliver a recovery of more than 80 percent to over 30,000 victims. We are all thankful that we could get it done in the middle of COVID-19, and that these checks will be delivered at this time of traditional joy and glad tidings. We believe this percentage recovery on such a scale is an historic result for victims all over the world.”
“That is an extraordinary level of recovery for a Ponzi scheme—but our work is not yet finished, and the Office’s tireless commitment to compensating the victims who suffered as a result of Madoff’s heinous crimes continues,” Strauss said.
The case is being handled by the office’s Money Laundering and Transnational Criminal Enterprises Unit, and Assistant United States Attorney Louis A. Pellegrino is in charge of the case. Remission of the forfeited funds is being handled by the office and the U.S. Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section.
In the past year, Madoff, who the Bureau of Prisons confirmed in February has 18 months to live, has sought a compassionate release from prison due to health issues.
Madoff’s sons, Andrew and Mark, who grew up in Roslyn, were involved in the firm and told the authorities about their father’s crimes in 2008, have both since died: Andrew in 2014 due to mantle cell lymphoma and Mark in 2010 through suicide by hanging. Their mother Ruth has mostly stayed out of the public eye since her husband’s sentence began.
