Court trustee, Irving Picard, who is working to collect funds from Bernard Madoff’s historic Ponzi scheme, is now looking to the Madoff family for victim remuneration. The Associated Press (AP) wrote that victim claims have climbed to about 9,000. According to Picard, quoted the AP, legal action “is a matter that’s being looked into,” citing a telephone conference call with reporters.
Picard has been filing lawsuits in Manhattan’s Bankruptcy Court against large investors, such as hedge funds, for the return of over $10 billion, representing fake profits, said the AP. Madoff’s firm paid the bogus funds to such firms and investors that, according to Picard, should have realized they were involved in the fraud. “I have a duty to investigate and to go to court to recover from persons and entities who received more than their share. In actual fact, persons who are subject to these recovery efforts actually received money stolen from others,” said Picard, quoted the AP. Stephen Harbeck, head of Securities Investor Protection Corporation (SIPC), who is working with Picard, also said during the call, “Wrongdoers should pay for their wrongdoing.”
Madoff pleaded guilty in March to running the infamous Ponzi scheme that globally robbed individual investors, charities, celebrities, hedge funds, and retirement plans. Madoff is scheduled for a sentencing hearing in June in which he faces a maximum 150-year federal prison term.
This week, Picard filed new lawsuits against those profiting from the scheme. In a prior report, Bloomberg.com reported that Picard sued Jeffry M. Picower, lawyer and philanthropist, and long-time Madoff friend as well as Harley International (Cayman) Ltd., a hedge fund. The suits total over $7 billion.
Picard also just filed a lawsuit against Ezra Merkin, one of several so-called middlemen who recruited investors for Madoff’s funds. According to charges filed against Merkin by the New York Attorney General, Merkin turned virtually all the money over to third-party money managers, including Madoff; pocketed hundreds of millions of dollars in management and incentive fees from his investors; and is accused of keeping $2.4 billion of investors’ funds with Madoff despite being aware of irregularities and other glaring red-flags related to Madoff’s investments.
Last week, Picard initiated a hardship program to reclaim Madoff’s assets on behalf of the disgraced financier’s victims. USA Today reported that Picard is hoping to quicken victim restitution. The hardship program will enable individual victims experiencing significant financial hardship to file a special claim by July 2 that seeks “an accelerated federal insurance payment,” Picard announced, said USA Today. Each applicant will be eligible to qualify for up to $500,000; program guidelines ban feeder fund requests and requests from businesses that moved investor funds to the disgraced financier, USA Today explained. The federal Securities Investor Protection Corporation insures clients of failed brokerages, providing up to $500,000 per investor, based on losses.
Boston.com reported that Picard said he is hoping to approve $100 million in claims no later than Memorial Day and is still looking for approximately $11 billion more from Madoff customers. Picard said, in the conference call, that to date, he has received 8,848 customer claims, identified $1 billion in assets; and filed six lawsuits for recovery of another $10.1 billion, said Boston.com.
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