The trustee charged with liquidating the assets of admitted Ponzi schemer Bernard Madoff says that more $1 billion has been found so far. According to the Associated Press, the $1 billion threshold was breached after $75 million was discovered in an account in Gibraltar.
Bernard Madoff pleaded guilty to 11 counts of securities fraud earlier this month. The criminal charges Madoff admitted to included securities fraud, wire fraud, mail fraud, money laundering and making a false filing with the U.S. Securities and Exchange Commission.
He now faces up to 150 years in prison. In addition to a long jail term, U.S. prosecutors are also seeking as much as $170 billion in forfeited assets from Madoff. According to the Los Angeles Times, that amount includes all of the money that moved through the Madoff accounts since the early 1980s, when the government says the investor fraud began.
Estimates of Madoff’s fraud have put the amount lost by investors at more than $64 billion. At a hearing yesterday, a lawyer working for the trustee said that slightly more than $1 billion had been discovered. According to the Wall Street Journal, the attorney also said French authorities are moving to seize Madoff’s residence in France, to satisfy claims by victims in that country, which is valued at around $1 million.
According to Bloomberg.com, the revelations were made yesterday during a court hearing in which the trustee’s attorney urged a judge to award the Securities Investor Protection Corp. (SIPC) power of attorney over a Madoff unit in the United Kingdom. But U.S. prosecutors probing Madoff urged U.S. District Judge Louis Stanton in New York to refuse the request, and hold the power in escrow. An Assistant U.S. Attorney told the judge that prosecutors have been in touch with their counterparts in the U.K. According to the Associated Press, the same Assistant U.S. Attorney argued that “the trustee has not explained why the trustee needs this power.”
However, the attorney representing the Madoff trustee said the power of attorney was an important tool, especially since actions may need to be taken quickly in foreign countries where things can happen to assets without warning, the Associated Press said. The U.S. Attorney countered that because authorities here already have relationships in foreign countries, they can act quickly to protect investor assets.
Judge Stanton has yet to make a decision on the issue.
As we’ve reported previously, Madoffâ€™s clients will be lucky to get as much as 10 cents on the dollar. Madoffâ€™s businesses didnâ€™t have many assets, and the money managed by his investment advisory firm has disappeared into thin air. It could also take as many as three years for the funds from any liquidation of Madoffâ€™s assets to be disbursed to investors.
In addition to the asset liquidation, some investors might be able to recover up to $500,000 each through the SIPC, the Associated Press said. The SIPC, which acts essentially as an insurance fund set up to help victims of securities fraud, sent out 8,000 claim forms to Madoff investors who might be eligible for recovery in early January. However, third-party investors – those whose Madoff investments were made through other entities – might not be eligible for the full SIPC benefit. Those investors could choose to sue the third party, and some hedge funds have already been named in such lawsuits.