The trustee seeking money for investors hurt by Bernard Madoff's Ponzi scheme said he hopes to begin distributing money in the near future but that lawsuits challenging his efforts are causing delays.
The trustee, Irving Picard, said he has recovered $2.6 billion of cash and equivalents since the fraud was uncovered in December 2008. He said a $7.2 billion settlement from a large Madoff investor, Jeffry Picower, had been delayed because of litigation.
The trustee has sued people and businesses, including JPMorgan Chase & Co and HSBC Holdings Plc, that he accuses of aiding Madoff or ignoring red flags about the fraud. Picard estimates that victims lost roughly $20 billion. Prosecutors pegged the size of Madoff's fraud at $65 billion.
Picard said he has filed more than 1,000 lawsuits in 30 countries to recover about $100 billion, and he and his legal team hope to recover a majority of what we are seeking.
The trustee has won court approval to collect from Picower's estate, but he said recovery of that sum has been delayed by an appeal and an objection to a forfeiture order.
While we hope to initiate distributions in the near future, it will take some time to distribute all the funds, in part because of litigation, Picard said on Tuesday, speaking to reporters on a conference call.
We anticipate that our position will ultimately prevail in the Picower case, he added.
Helen Chaitman, a lawyer for Madoff investors who is appealing the Picower settlement, did not immediately respond to a request for comment. She also is involved in other court challenges to Picard's efforts, arguing that he is treating some former Madoff clients unfairly.
David Sheehan, the trustee's general counsel, said members of Picard's team met Madoff in prison, and that Madoff was a confirming source for much of the information they had learned about the Ponzi scheme.
But he questioned Madoff's assertions that the fraud began in the early 1990s.
We are very comfortable that this fraud began as early as 1983, he said.
Picard's largest lawsuit is a $19.6 billion case against Austrian banker Sonja Kohn and her Bank Medici, Italy's UniCredit SpA and its Bank Austria unit, and 53 other defendants.
Picard has also sued JPMorgan, Madoff's main bank, for $6.4 billion and other lenders including HSBC and UBS AG.
He is also suing owners of the New York Mets, a $1 billion case that has clouded the baseball team's immediate future and caused the owners to seek a buyer for part of the team.
(Reporting by Jonathan Stempel in New York; Additional reporting by Sarah N. Lynch in Washington, D.C.; Editing by Phil Berlowitz, Bernard Orr)