Bernie Madoff's Ponzi scheme took in an estimated $20 billion. (Photo Credit: Public Domain/U.S. Department of Justice/Wikipedia)

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.

Sources

Associated Press/Reuters

What happened to Jeffry Picower

You don't look well, Bernie (Photo: picasaweb.google.com)

The Bernard Madoff Ponzi scheme was the largest financial fraud scheme perpetuated (allegedly) by one individual in United States history. When Madoff was thrown in prison, some people felt that he had gotten his just desserts and that the punishment fit the crime. While those on the outside may be resorting to the cheapest personal loans for aid, at least they can walk about free.

I’m not one of those people. I was not directly impacted by the Ponzi scheme, mind you. But it has been painfully clear to me from the outset that this operation was so large that it couldn’t have been run by only one person. The prosecution tried to get him to give up names and offer some consolidation of illegal activities, but the prosecution was unsuccessful. So Bernard Madoff is serving a 150-year term that will coincide with the end of his life, while others who are equally guilty of defrauding and destroying people’s lives remain free.

Now we see why Madoff has remained silent

Multiple reports indicate that Madoff has cancer. Specifically, Madoff is said to have pancreatic cancer that is killing him. It is said he hasn’t much longer to live, which will make obtaining the names of his conspirators near to impossible. For instance, RTT News (as well as reports by the New York Post and Wall Street Journal) indicate that the 71-year-old financier is “taking 20 pills a day to treat his cancer,” and that Madoff is telling inmates he hasn’t long to live. The specific nature of the cancer has not been definitely confirmed, but Brian Baxter blogs for AM Law Daily that it is pancreatic cancer.

Madoff’s wife Ruth or their lawyers have yet to respond to these reports.

Deception and death

According to the New York Post, the news has “tongues wagging within white-collar circles.”

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“If Madoff is truly dying, this revelation perhaps sheds new light on the real motivation for his voluntary admission of guilt,” says former federal prosecutor Robert Mintz. “It would be the ultimate act of manipulation for Madoff to have fallen on the sword, confessing his crime knowing that his days were numbered. And taking to his grave the names of those who helped him carry out his deception.”

Death attracts fans, particularly death of the rich and famous. This may be why various prison gangs have tried to recruit Madoff to their cause, but I’ll bet his financial expertise also has something to do with it. If you think people like Bernie Madoff don’t have contact with the outside world when they want it, you’re only partially right. Not as easy as whipping out a cell phone and making a call, but people in Madoff’s position have to be resourceful to get to where they are in life.

Getting ready to die

(Photo: picasaweb.google.com)

But I was talking about death, wasn’t I? The Post claims Madoff and his cancer have been participating in various Native American ceremonies that are intended to purify his body… or prepare him to pass into death, I’m not sure which. Prayers, hot rocks, ceremonial pipes… I know they may have cultural significance to some (and New Age commercial potential for others), but as Blind Willie McTell sings “Might ‘s well get ready, cause you got to die.” How about doing what’s right before you do, Bernie? Consolidation of information could save people from having to live off the cheapest personal loans…

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