Madoff victims win $7.2bn from fraud insider

The estate of Madoff insider Jeffry Picower settled civil claims of $7.2bn (£4.6bn) yesterday, significantly boosting the amount available to repay investors swindled in the epic fraud.

Mr Picower, a long-time friend of Bernard Madoff, died of a heart attack in Florida in October 2009 – five months after the court-appointed trustee, Irving Picard, claimed Mr Picower's rates of returns from investments were implausibly high.

Documents filed in the US District Court in New York said Mr Picower's wife, Barbara, agreed to forfeit $7.2bn of net withdrawals, considered proceeds of the Madoff fraud. The settlement is the largest yet for the trustee searching for proceeds of the fraud.

Mrs Picower said: "We will be returning every penny received from almost 35 years of investing with Bernard Madoff. I believe the Madoff Ponzi scheme was deplorable and I am deeply saddened by the tragic impact it continues to have on the lives of its victims."

The family of the accountant and lawyer turned billionaire philanthropist said that Mr Picower had been working toward reaching a settlement at the time of his death. Mrs Picower spoke of her hope that the multi-billion dollar pay-out might "ease the suffering of the fraud victims".

Following Friday's settlement, the trustee overseeing the bankrupt investment company, traders and investors say they are already starting to see potential claims on the money they lost when the scheme collapsed in 2008.

The FBI and US prosecutors had investigated whether Mr Picower knew he was profiting from Madoff's scheme, considered the biggest financial fraud in history. The Picower estate's lawyers claimed he knew nothing of the fraud but victims' lawyers argued that he must have recognised the fact that investment returns were "implausibly high". Madoff admitted last year to defrauding thousands of investors through a Ponzi scheme, which paid out returns using money from new investors rather than interest made from profits.

The scheme, which had gone unnoticed since the early 1990s, unravelled during the economic downturn last year when Madoff's investors attempted to withdraw funds amounting to $7 billion which he could not produce.

Madoff, 72, is currently serving a 150-year jail sentence after pleading guilty in March 2009 to orchestrating the fraud. Prosecutors estimated that the scam took in about $65bn.

The Madoff trustee has estimated the amount investors lost at around $20bn. On the second anniversary of Madoff's arrest earlier this month, Mr Picard had managed to secure around $2.6bn in settlements and asset sales.

Start your day with The Independent, sign up for daily news emails
News
i100 In this video, the late actor Leonard Nimoy explains how he decided to use the gesture for his character
Arts and Entertainment
Secrets of JK Rowling's Harry Potter workings have been revealed in a new bibliography
arts + ents
News
Down-to-earth: Winstone isn't one for considering his 'legacy'
people
News
news
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Sauce Recruitment: Retail Planning Manager - Home Entertainment UK

salary equal to £40K pro-rata: Sauce Recruitment: Are you available to start a...

Ashdown Group: Front-End Developer - London - up to £40,000

£35000 - £40000 per annum: Ashdown Group: Creative Front-End Developer - Claph...

Recruitment Genius: Product Quality Assurance Technologist - Hardline & Electric

£18000 - £24000 per annum: Recruitment Genius: The role in this successful eco...

Ashdown Group: QA Tester - London - £30,000

£28000 - £30000 per annum: Ashdown Group: QA Tester - London - £30,000 QA Tes...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower