Picower estate to pay $7.2 billion in Madoff fraud agreement
The Associated Press and Reuters report that Irving Picard, the court-appointed trustee in charge of recovering funds for the victims of Bernard Madoff, has reached settlement with Madoff’s primary beneficiary in a massive Ponzi scheme. The estate of Jeffry Picower, the late Florida philanthropist and businessman, has agreed to repay $7.2 billion to Bernie Madoff’s victims.
Jeffry Picower’s estate denies involvement in Ponzi scheme
Jeffry Picower’s widow Barbara Picower, who is the official representative of the estate, has maintained that her husband “was in no way complicit” with Bernie Madoff’s fraud. The Madoff-related profits were supposedly made on “stock trades.” However, she has stated that the estate of Jeffry Picower will “return every penny received” from Madoff investments.
Initial estimates from U.S. prosecutors were that the Bernie Madoff Ponzi scheme took in about $65 billion. Trustee Irving Picard later reduced that figure to $20 billion, still considered the most lucrative instance of investment fraud in history. Jeffry Picower’s $7.2 billion settlement allegedly covers more than one-third of fraud funds. Picard argued in New York bankruptcy court that Picower had to have known that the returns were “implausibly high” and in some way tied to fraudulent activity.
‘The largest civil forfeiture payment in American judicial history’
According to the New York Times, prosecutors in the Bernie Madoff fraud case say that the settlement will be the largest of its kind in the history of U.S. courts. It should enable a sizable number of fraud victims to get “at least half” of their funds back, a remarkable achievement in the minds of those who had resigned themselves to the idea that they’d lost everything for good.
The many victims of Bernard Madoff
The Bernie Madoff Ponzi scheme cut a wide swath across America’s financial landscape. Individuals, banking institutions and various hedge funds invested money in Madoff investment schemes, only to see everything disappear when the fraud was exposed. Some, like Jeffry Picower, had been drawing massive profits for years. Unlike most at the time, however, Picower took the money and ran.