Madoff Trustee Reaches a $7B Settlement with Investor’s Estate
The estate of a Bernard Madoff investor and friend who reaped a multibillion-dollar profit has agreed to a $7.2 billion civil settlement that will help compensate Ponzi scheme victims.
The deal was approved by the widow of investor Jeffry Picower, the Wall Street Journal (sub. req.) reports. The Madoff bankruptcy trustee, Irving Picard, will recover $5 billion and federal prosecutors will recover $2.2 billion through civil forfeiture. All the money will be used to compensate victims, whose losses have previously been estimated at $20 billion.
The settlement represents the largest civil forfeiture payment in U.S. history, according to the New York Times DealBook blog. With the $7.2 billion settlement, Picard will have collected about $10 billion for defrauded Madoff investors, compensating about half their estimated losses.
Picower, a graduate of Brooklyn Law School, was found dead in the swimming pool of his Palm Beach mansion in 2009. He was 67 years old and had a history of cardiac problems and Parkinson’s disease. A suit filed last year by Picard claimed Picower had reaped $7.2 billion in false profits from his Madoff investments. One Picower account had an annual profit in 1999 of more than 950 percent, the suit said.
