NEW YORK – Victims of Bernard Madoff’s $17.5 billion fraud are set to receive a fresh round of payments totaling about $322 million — the latest distribution since the biggest Ponzi scheme in U.S. history fell apart six years ago.
The proposed payout will boost the sum returned to victims to about $7.2 billion, or almost 49 percent of their lost principal, Irving Picard, the trustee unwinding Madoff’s defunct company, said Monday in a statement.
Picard has raised much of the cash with lawsuits against former Madoff customers who profited from the fraud by taking more out from their accounts than they put in. The trustee last month reached $10 billion in recoveries, several billion of which is locked up in drawn-out litigation with investors seeking larger payouts.
Picard and his team have been “working diligently on a number of fronts, in and out of the courtroom, using all the legal tools at our disposal,” David Sheehan, the lead lawyer for the trustee, said in the statement.
The distribution — the fifth in the case — needs approval by the U.S. Bankruptcy Court in Manhattan, Picard said. A hearing on the request is scheduled for Jan. 15, according to the statement.
Some of the biggest recent influxes of cash have come from settlements with offshore funds that funneled money to Madoff’s investment advisory business. Primeo Fund and Herald Fund, both based in the Cayman Islands, agreed in November to pay a total of $497 million to end lawsuits over their withdrawals from Madoff’s company.
Days later, Madoff’s lifelong friend, Edward Blumenfeld, a New York real estate developer who built a fortune by investing with the con man for decades, won court approval of a $62 million settlement.
The payout proposal comes two weeks after a judge overseeing the criminal case against five former Madoff employees convicted of fraud handed out sentences that were far shorter than the government had sought. The prison terms average about five years.
Madoff, 76, pleaded guilty in 2009 to running the scam and is serving 150 years in a federal prison in North Carolina.