US: Madoff Fraud Victims Get $4.3bn As Payouts

The fund created by the US government to help compensate victims of the late fraudster Bernard Madoff has begun making its final round of payments, according to a statement by the Department of Justice (DoJ).

The payouts being made by the Madoff Victims Fund (MVF) are worth $131.4m (£104.6m) and will bring the total amount it has returned to 40,930 claimants to $4.3bn.

Madoff, a Wall Street financier disgraced after he admitted to one of the biggest frauds in US financial history, died in prison in 2021.

He had been serving a 150-year sentence after pleading guilty in 2009 to running a so-called Ponzi scheme, which paid investors with money from new clients rather than actual profits.

“MVF’s distributions offset one of the most monstrous financial crimes ever committed,” said Richard C Breeden, who runs the MVF.

Mr Breeden is a former chairman of the US financial regulator, the Securities and Exchange Commission (SEC).

“We have brought tens of thousands of victims to the greatest recovery we could achieve,” he added.

Madoff’s victims were a mixture of wealthy individuals, less well-off people and companies – both large and small – as well as schools, charities and pension funds.

The MFV estimates it will have recovered nearly 94% of the victims’ proven losses when it completes its mission in 2025.

Another $14.7bn has been returned through bankruptcy proceedings to Madoff customers.

Set up in 1960, Bernard L Madoff Investment Securities became one of Wall Street’s largest market-makers – matching buyers and sellers of stocks – and Madoff served as chairman of the Nasdaq stock trading platform.

Over the years, the firm was investigated eight times by the SEC because it made exceptional returns.

The list of those scammed included actor Kevin Bacon, Hall of Fame baseball player Sandy Koufax and film director Steven Spielberg’s charitable foundation, Wunderkinder.

BBC/Ejiofor Ezeifeoma