Madoff victims get half a billion ... and counting
Trustee still tallying assets and claims in Ponzi scheme. More than 2,000 investors withdrew more than they invested.
NEW YORK (CNNMoney.com) -- More than $500 million has been returned to the victims of Ponzi schemer Bernard Madoff, according to the trustee in charge of recovering stolen assets.
Irving Picard, the court-appointed trustee in charge of recovering and distributing assets, said Wednesday that the Securities Investor Protection Corp. (SIPC) has turned over $534.25 million to 1,558 investors in Madoff's firm. SIPC is the organization that provides coverage to investors.
So far, $1.4 billion has been recovered from Madoff, and SIPC expects that tally to grow to $1.5 billion by the end of the year. But the total losses exceed $19 billion.
The report Wednesday details Picard's challenges in helping Madoff investors. More than 2,000 of them earned more money than they deposited with Madoff in the first place, Picard said, adding that he will examine these accounts closely over the next six to nine months.
But Picard also said he does not plan to sue people who don't have money or are facing hardships such as foreclosures or medical bills.
Billionaire Jeffry Picower, 67, was the most prominent of the successful Madoff investors. Earlier this year, in May, Picard claimed in court filings that Picower was a key beneficiary of Madoff's scheme for more than 20 years and that he "knew or should have known that [he] was profiting from fraud because of the implausible high rates of return" on his accounts.
On Oct. 25, Picower's wife discovered him unconscious in the pool of his Palm Beach, Fla., home. He was pronounced dead at a nearby hospital following a heart attack.
Madoff pleaded guilty in March to 11 federal counts related to his operation of a massive, long-running Ponzi scheme, masquerading his investment firm as legitimate when it was nothing more than a front. He would use the funds from new investors to send payments to his more mature investors. He would falsely portray these payments as proceeds from investments, when they were actually stolen money.
Madoff claimed, through written statements to his clients, to have had $65 billion, but this is a fraudulent figure. Picard is still trying to determine how much money Madoff stole.
The recent pay-out exceeds the $520 million total from all 321 prior liquidations handled by SIPC since the program began in 1970, according to SIPC President Stephen Harbeck.