The court-appointed trustee in charge of liquidating Bernard Madoff’s firm began sending out checks for a total of $1.2 billion in recovered funds to victims of Madoff's ponzi scheme. The payout -- with checks averaging $1.1 million each -- is the sixth since Madoff’s arrest in 2008.
The distribution, which started Friday, boosts victims’ recoveries to $9.16 billion so far -- about 57 percent of the cash they lost, trustee Irving Picard said in a statement. Thousands of retirees, charities, investment funds and other clients had invested about $17.5 billion in principal to Madoff’s decades-long scheme.
After the sixth payout, 1,269 of the 2,238 Madoff accounts with valid claims will have been fully satisfied, and everyone owed $1.16 million or less will have been paid in full, the trustee said. According to Picard’s website the trustee board has recovered or reached agreements to recover roughly $10.91 billion.
“We didn’t expect to get anything back, so the fact that we’ve gotten something is nice,” Elisa Schwartz, an investor in the scheme, told Bloomberg. “We’re trying to help our kids and our grandchildren in college -- those are the things we wanted to use the money for.” Elisa and her husband, Edwin Schwartz, now 76 and 82 years old, lost part of their savings seven years ago, Bloomberg reported.
The payout comes a week before the seventh anniversary of the uncovering of the ponzi scheme. Madoff, 77, pleaded guilty in March 2009 and is serving a 150-year prison term.
Madoff’s scheme generated consistently high returns for its investors for decades, which he credited to a proprietary investment strategy. But the scheme collapsed in Dec. 2008 amid the U.S. financial crisis, as investors sought their money back. Investigators later discovered that Madoff did not make any of the investments he promised. Instead, he used funds from new customers to pay earlier clients, the modus-operandi of a Ponzi scheme.