Victims of Bernie Madoff’s massive Ponzi scheme, which robbed people of billions of dollars, are getting a nice check this holiday season: the trustee unraveling Madoff’s extensive fraud will begin to send out repayments to victims that average about $1.1 million each. The total amount to be repaid is close to $1.2 billion.
After the payouts are completed, 57% of the lost funds will be restored to the 1,300 victims of the scam. The trustee responsible for repairing Madoff’s fraud, Irving Picard, said that the repayments will “exceed similar efforts related to prior Ponzi scheme recoveries, in terms of dollar value and percentage of stolen funds recovered.”
Madoff, 77, pled guilty in 2009 and was sentenced to 150 years in prison, the maximum sentence allowed. Five of his closest associates were convicted last year.
Thus far, the U.S. Justice Department has not paid anything from its $2.35 billion Madoff Victim Fund. The fund is overseen by Richard C. Breeden, former U.S. Securities and Exchange Commission Chairman, who has been going through thousands of claims since December of 2012.
This most recent distribution comes after the U.S. Supreme Court refused to hear appeals from victims who believe they should receive interest on their losses.
Picard has recovered or made agreements to recover about $10.91 billion of the stolen funds, which is roughly three-fifths of the total $17.5 billion of principal Madoff customers lost.
Madoff convinced customers to invest their savings with him, falsely promising them consistent profits in return. The returns Madoff promised simply were not possible—certainly not in a short time frame, if ever. Things for Madoff began to decline when investors wanted $7 billion back in returns; at the time, Madoff had only $200 million.
Business Insider suggests that a major reason Madoff’s scam went undetected for so long was because he was a widely respected financier and trusted source. He helped launch the Nasdaq market and was on the board of the National Association of Securities Dealers. And at 70, he was simply easy to believe.
Madoff’s is considered to be the largest Ponzi scheme ever.