DOJ begins compensating victims of Bernie Madoff Ponzi scheme

DOJ begins compensating victims of Bernie Madoff Ponzi scheme

The US Department of Justice (DOJ) [official website] announced [press release] Thursday that it has begun distributing compensation to victims of Bernie L. Madoff Investment Securities LLC’s (BLMIS) Ponzi scheme.

The first set of distributions involve $722.5 million that will be distributed to 24,631 victims. The distribution is the largest distribution of forfeited funds in the DOJ’s history.

The funds will be distributed through the Madoff Victim Fund (MVF). In total, $4.05 billion will be distributed to victims of BLMIS. More than 65,000 petitions were submitted to the MVF, which represents victims from 136 countries. Most of the funds were recovered from third parties, not Bernie Madoff himself. $2.2 billion was recovered from the estate of Madoff investor Jeffry Picower, and $1.7 billion was recovered from JPMorgan Chase Bank N.A.

In January a federal judge blocked [JURIST report] litigation from A&G Goldman Partnership and Pamela Golden that sought to recover $11 billion from Picower’s estate. Madoff was sentenced [JURIST report] to 150 years in prison in June 2009 for the Ponzi scheme that is believed to have defrauded investors of over $65 billion.