Bernard Madoff victims get first compensation cheques

• Payments go to 1,230 victims of Bernard Madoff’s Ponzi fraud • Initial distribution delayed by legal ruling on New York Mets Victims of Bernard Madoff’s fraud scheme are set to receive $312m (£202) this week as the trustee charged with recovering their cash sends out their first set of compensation cheques. The money will be split between the holders of 1,230 Madoff accounts and represents a recovery of roughly 4.6 cents for every dollar they invested. Irving Picard, court-appointed trustee for the Madoff victims, said he had recovered, or entered into agreements to recover, approximately $8.7bn, about half the $17.3bn he estimates was lost in Madoff’s Ponzi scheme. “This initial distribution is the first return of stolen funds to Madoff’s defrauded customers,” said Picard. “Significant, additional funds – currently unavailable for distribution due primarily to appeals – will ultimately be returned to their rightful owners, as well as future monies yet to be recovered. The need among many Madoff customers is urgent, and we are working to expedite these distributions.” Picard said distribution of the rest of the money he has recovered was being held up by appeals or the timing of payments. Picard’s $5bn settlement with the estate of late investor Jeffry Picower – his largest settlement to date – is currently being appealed. The payments were to go out last week but were delayed as Picard considered the effects of a court ruling over Madoff profits given to the owners of the New York Mets baseball team. On 27 September Judge Jed Rakoff of the US district court in Manhattan ruled that the trustee was allowed to seek only the return of fictional profits the Mets owners withdrew in the last two years of the fraud, which lasted more than a decade. The judge also rejected Picard’s bid to recover preference claims, the cash paid to team owners in the last 90 days of the fraud. Picard calculated that if the ruling applied to the hundreds of other claims he is pursuing, it would reduce potential recoveries by $6.2bn. “The order had raised potential issues regarding the distribution, which have since been resolved, allowing the distribution to commence,” said Picard. The trustee has sued for nearly $100bn in damages and fictional profits that he claims banks, including HSBC and JP Morgan, hedge funds and investment managers made dealing with Madoff during his decades-long scheme. Madoff is serving a 150-year jail sentence after being found guilty of running one of the largest fraud schemes of all time. Bernard Madoff United States Dominic Rushe guardian.co.uk

Posted by on October 5, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.