Estate of Madoff insider settles $7.2 billion claim

By @ibtimes on

The estate of Jeffry Picower settled a $7.2 billion lawsuit filed by the Madoff firm trustee, significantly increasing the amount available to repay investors swindled in the epic fraud, U.S. officials said on Friday.

Picower, who died of a heart attack in Florida in October 2009 at the age of 67, was sued by trustee Irving Picard, who described the accountant and lawyer turned billionaire philanthropist as one of the biggest beneficiaries of Madoff's fraud.

A legal source briefed on the settlement said it was for the full amount of the $7.2 billion claim. The Picower family said at the time of his death that he had been working toward reaching a settlement. A spokeswoman for the family declined to comment.

Picard and law enforcement agencies that had investigated Picower declined to comment until later on Friday.

A press conference will be held today to announce a settlement with the Estate of Jeffry M. Picower to benefit the victims of Bernard L. Madoff's Ponzi scheme, said a joint statement by Picard, the office of the Manhattan U.S. Attorney and other law enforcement agencies.

Picard had secured about $2.6 billion in settlements and asset sales by the two-year anniversary of Madoff's December 11, 2008, arrest and collapse of his firm, Bernard L. Madoff Investment Securities LLC.

Madoff, 72, is serving a 150-year prison sentence after pleading guilty in March 2009 to orchestrating the massive fraud over decades. U.S. prosecutors estimated the fraud took in about $65 billion.

Picard has put the amount of money investors lost at about $20 billion, considered the biggest investment fraud in history.

The trustee is suing hundreds of individuals, banks and funds around the world that he asserts benefited improperly from the massive Ponzi scheme. A Ponzi scheme is one in which early investors are paid with the money of new clients..

Picard and a team of lawyers have sued for a total of more than $50 billion over the past two years in U.S. Bankruptcy Court in New York.

(Reporting by Grant McCool, editing by Gerald E. McCormick and Lisa Von Ahn)

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