Some of the victims of Bernard Madoff's Ponzi scheme will have to keeping waiting to get their money back, according to a former Securities and Exchange Commission chairman who is now in charge of distributing billions of dollars in stolen assets.
SEC veteran and hedge fund founder Richard Breeden, who was appointed by the U.S. Department of Justice in December of 2012 as "special master" of $2.35 billion in forfeited assets, announced a delay in the distribution of those funds to victims of Madoff's scheme.
Breeden is having trouble distinguishing Madoff "victims" from "customers," which is stymieing the process of returning stolen assets, according to a written statement on his website www.madoffvictimfund.com.
"Decisions on eligibility will affect literally thousands of potential victims," some of whom have not yet received any recovered funds. "Therefore, the Department of Justice has to consider all aspects of these complicated issues ... so that it can produce the most equitable overall result."
The assets controlled by Breeden, which have been primarily collected through forfeitures, are on top of the $9.4 billion in funds that the court-appointed trustee Irving Picard recovered from Madoff's $17.5 billion scheme. So altogether, about $11.7 billion has been recovered from Madoff.
Picard's separate pool of Madoff assets has been largely collected through civil settlements. Picard has already returned about half his recovered funds -- nearly $4.8 billion -- to victims.
Breeden did not say how long his efforts will take, only that he plans to publish updates for victims to his website every 45 days.
As part of the recovery process, Madoff's personal assets were seized in order to compensate victims, including his yacht "The Bull," jewelry, a Mets jacket, a penthouse in Manhattan, a beachhouse in Montauk, N.Y., and posh homes in Florida and the South of France.
Correction: An earlier version of this article incorrectly included the $2.35 billion fund controlled by Breeden as part of the $9.4 billion that the trustee recovered from Madoff.