Edward Y. Kim, the Acting United States Attorney for the Southern District of New York; Brent S. Wible, the Principal Deputy Assistant Attorney General of the United States and head of the U.S. Department of Justice’s Criminal Division; and James E. Dennehy, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that the Madoff Victim Fund (“MVF”) began its tenth and final distribution to victims of the Bernard L. Madoff fraud scheme of over $131.4 million. These funds were forfeited by the U.S. government in connection with the Bernard L. Madoff Investment Securities LLC (“BLMIS”) fraud scheme.
In this distribution, payments will be sent to more than 23,000 victims across the globe, bringing their total recoveries to 93.71% of their fraud losses. Most of these victims were small investors who lost less than $500,000 in the fraud. Through its ten distributions, MVF has paid over $4.3 billion to 40,930 victims in 127 countries as compensation for losses they suffered from the collapse of BLMIS.
This distribution represents the culmination of a decade of work identifying thousands of victims around the world and unwinding layers of complex financial transactions to provide compensation to eligible victims.
Acting U.S. Attorney Edward Y. Kim said: “This Office has never stopped pursuing justice for victims of history’s largest Ponzi scheme. With this tenth and final distribution, we have succeeded in compensating 40,930 victims with close to 94% of their losses. As this extraordinary effort demonstrates, this Office and the U.S. Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section are committed to protecting and assisting victims of crime, no matter how long it takes and no matter how complicated the endeavor.”
Principal Deputy Assistant Attorney General Brent S. Wible said: “The Criminal Division, through its Money Laundering and Asset Recovery Section (“MLARS”), is proud to administer the department’s remission program to compensate victims using forfeited assets. The unprecedented scope and complexity of the Madoff remission process shows the power of forfeiture to recover assets and to compensate victims — a primary goal of the department’s Asset Forfeiture Program. This tenth and final distribution, led by MLARS’s dedicated victim compensation team, achieves the department’s goal of compensating victims by returning over $4 billion in forfeited assets to more than 40,000 victims of Madoff’s crimes and achieving nearly full recovery for these victims.”
FBI Assistant Director in Charge James E. Dennehy said: “Today’s distribution represents an unprecedented conclusion of victim compensation from civil forfeiture actions related to the Madoff scheme with more than $4 billion repaid to over 40,000 victims. These victims implicitly trusted Madoff with their investments only to ultimately lose significant monies to his selfish plan. With the steadfast support from the Justice Department, the FBI will continue its tireless seizure of assets from criminals who steal from others and seek to recover those assets for victim losses.”
According to court documents and information presented in related proceedings, for decades, Bernard L. Madoff used his position as chairman of BLMIS, the investment advisory business he founded in 1960, to steal billions from his clients. On March 12, 2009, Madoff pleaded guilty to 11 federal felonies, admitting that he had turned his wealth management business into the world’s largest Ponzi scheme, benefitting himself, his family and select members of his inner circle.
On June 29, 2009, then-U.S. District Judge (now senior U.S. Circuit Judge), Denny Chin sentenced Madoff to serve 150 years in prison for running the largest fraudulent scheme in history. Of the over $4 billion that has been made available to victims, approximately $2.2 billion was collected as part of the historic civil forfeiture recovery from the estate of deceased Madoff investor Jeffry Picower. An additional $1.7 billion was collected as part of a deferred prosecution agreement with JPMorgan Chase Bank N.A. and civilly forfeited in a parallel action. The remaining funds were collected through a civil forfeiture action against investor Carl Shapiro and his family and from civil and criminal forfeiture actions against Bernard L. Madoff, Peter B. Madoff and their co-conspirators.
The MVF’s payouts would not have been possible without the extraordinary efforts of the U.S. Attorney’s Office for the Southern District of New York, the Criminal Division’s Money Laundering and Asset Recovery Section, and the FBI in the prosecution of Madoff’s crimes and the recovery of assets supporting the forfeiture in this case.
The MVF is overseen by Richard Breeden, former Chairman of the U.S. Securities and Exchange Commission, who serves as Special Master appointed by the Department of Justice to assist in connection with the victim remission proceedings. Mr. Breeden and his team at MVF have been essential in working with the Department to evaluate over 66,000 remission petitions involving billions in cash flows, and to compute each victim’s fraud losses to enable payments to be made.
This case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorney Tara M. La Morte is in charge of the prosecution. The remission of these forfeited funds is being handled by the Office and the U.S. Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section.
More information about MVF and its compensation to victims of BLMIS is available on the MVF website at www.madoffvictimfund.com, such as eligibility criteria, process updates, and frequently asked questions. Further questions may be directed to the MVF at 866-624-3670 or info@madoffvictimfund.com.