Bernie Madoff’s Ponzi Scheme Victims to Receive Additional $568 Million; Total Recoveries Reached $18 Billion
According to a recent settlement announcement, around 31,000 victims of Bernie Madoff’s Ponzi scheme will get an additional $568 million in payments.
United States v. Bernard L. Madoff
The Madoff Investment Scandal, 2008
The Madoff investment scandal involved a high-profile instance of stock as well as securities fraud that was exposed in late 2008. Bernie Madoff — full name Bernard Lawrence Madoff —, the former chairman of the NASDAQ and is also the founder of the Bernard L. Madoff Investment Securities LLC, revealed in December 2008 that his wealth management arm was an intricate multibillion-dollar Ponzi scheme.
The investment securities company was founded by Madoff in 1960, and he served as chairman until his arrest. The firm employed Peter, Madoff’s brother, as senior managing director as well as chief compliance officer, Shana Madoff, Peter’s daughter, as officer and attorney of rules and compliance, and Madoff’s sons Mark and Andrew. Peter received a ten-year prison sentence, and Mark committed suicide two years following his father’s arrest.
Federal officials apprehended Madoff on December 11, 2008, after being alerted by his sons. He pleaded guilty to 11 federal offenses and admitted to conducting the biggest private Ponzi scheme on March 12, 2009. He was then sentenced to 150 years of imprisonment and $170 billion in Bernie Madoff Settlement on June 29, 2009. According to the initial federal allegations, Madoff stated that his business had approximately US$50 billion in liabilities.
Prosecutors assessed the fraud’s scale at $64.8 billion, focusing on the amounts in Madoff’s 4,800 clients’ accounts as of November 30, 2008. Taking opportunity costs and taxes on fraudulent earnings out of the equation, around half of Madoff’s direct investors lost nothing.
A whistleblower whose warnings were disregarded estimated that roughly $35B of the money Madoff allegedly stolen was fictitious earnings he reported to his clients.
The Securities and Exchange Commission (SEC) has been criticized for not conducting a thorough investigation into Madoff. As early as 1999, concerns regarding his firm were raised. The legal trading arm of Madoff’s business, which his two sons operated, was one of Wall Street’s leading market makers, ranking sixth in 2008.
Madoff’s personal and commercial asset freeze triggered a chain effect throughout the global business and philanthropic communities, leading numerous organizations, including the Robert I. Lappin Charitable Foundation, the Picower Foundation, and the JEHT Foundation, to temporarily close.
Additional Payment of $568 Million
Another $568 million is scheduled to be distributed to victims of Bernie Madoff’s Ponzi scheme to assist them in recovering from their losses. This increases the total amount recovered to more than $18 billion.
Over 42,000 persons are entitled to the Bernie Madoff Settlement. As per the Justice Department, this recent payout brings the total amount recovered by Bernie Madoff Ponzi scheme victims to 81.35% of their losses.
Nearly 31,000 victims will get payment from the government-run Madoff Victim Fund, which is administered by Richard Breeden — former US Securities and Exchange Commission Chairman. The fund compensates victims who lost money directly or indirectly through Madoff.
The fund received the majority of its $4.05 billion through a settlement involving Madoff’s former bank and the US Department of Justice, JPMorgan Chase & Co, and a settlement with trustee Irving Picard and the estate of Madoff former investor Jeffry Picower.
Editor’s Note on Bernie Madoff Settlement:
This article is written to inform you of the latest additional payment of $568 million to be given to the victims of the Bernie Madoff Ponzi scheme. We also recommend you to read about Oppenheimer’s John J. Woods Fraud.
Case Name & No.: United States v. Bernard L. Madoff
Jurisdiction: The United States Attorney’s Office for the Southern District of New York
Products/Services: Securities fraud
Allegations: Bernie Madoff performed a multibillion-dollar Ponzi scheme
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