Victims of convicted Ponzi scheme fraudster Bernard Madoff will be receiving nearly $2.5 billion in checks that were mailed Wednesday, according to the Securities Investor Protection Corporation.
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The SIPC credited the hard work of Madoff liquidation trustee Irving H. Picard and his attorneys in reaching that major milestone.
Approximately $17.3 billion in principal is estimated to have been lost in the Ponzi scheme by direct customers of Bernard L. Madoff Investment Securities who filed claims. When combined with the funds already returned to BLMIS customers, the second interim distribution satisfies more than 50 percent of the total Madoff accounts with allowed claims. Nearly 1,100 accounts were covered by the second distribution.
The Madoff liquidation trustee's recovery of more than $9.147 billion has been made possible through advances provided by SIPC, which is funded by the securities industry. To date, SIPC has advanced over $800 million to pay customer claims and an additional $621 million to fund the liquidation proceeding. No monies recovered by the Trustee have been used to pay any administrative expenses. All recoveries made by the Trustee benefit customers.
"This shows that the customer protection program created by Congress works,” SIPC president Stephen Harbeck said in a statement. “Trustee Picard has been tireless in his efforts to recover monies and distribute them in a fair and equitable way to all customers with allowed claims at the failed BLMIS brokerage. In doing so, he has been able to satisfy more than half of the BLMIS accounts with allowed claims. We are pleased that SIPC has played an important role in making possible the recoveries. SIPC will continue to work with the Trustee to achieve the maximum recovery for customers.”
Madoff pleaded guilty in March 2009 to 11 felony counts of defrauding his investors of an estimated $65 billion. He was sentenced to 150 years in prison.