On Dec. 10, 2008, Bernard Madoff confessed to his sons, Mark and Andrew, that he was a fraud, operating a pyramid-style scam. He was arrested the next day. In June 2009, the 71-year-old Madoff was sentenced to 150 years in prison. The fall-out from the largest Ponzi scheme by a single person has not only resulted in billions of dollars lost by both individuals and institutions, but it has also resulted in suicides, including the suicide of Madoff's son Mark on December 11, 2010, the second anniversary of Bernard Madoff's arrest.
In the wake of the scheme, Irving Picard, trustee for the Madoff liquidation proceedings, has delivered promising news. Barbara Picower, the widow of philanthropist Jeffry Picower, a Madoff investor who drowned in his swimming pool in Palm Beach, Florida after suffering a massive heart attack, has returned $7.2 billion, the entire amount Picower withdrew from Madoff's accounts over 35 years. The fund is a "truly staggering sum which really was always other people's money," said Preet Bharara, U.S. Attorney, New York, bringing the total to almost half of the $20 billion lost.
Picard's goal of assembly the "largest fund possible" for the Madoff victims who have legitimate claims for restitution is also enhanced by other significant forfeitures.
Carl Shapiro, the Boston philanthropist who invested with Bernie Madoff as far back as 1961, has agreed to pay back $625 million. A large charity provider in the Boston area, The Carl and Ruth Shapiro Family Foundation "suspended all new grant making activities" in 2009.
In addition to the Shapiro forfeiture, Picard is hoping to receive a significant settlement from the owners of the New York Mets, which includes team owner Fred Wilpon, his firm Sterling Equities and other defendants. According to Picard, the settlement is underway.
Hadassah: The Women's Zionist Organization of America has agreed to pay back $45 million. The amount represents a portion of what the organization took in. Like all of the investors who have returned money, Hadassah's National President Nancy Falchuk asserts that her organization was fooled, "Let me emphasize that Hadassah, like so many others, was misled. Precisely because we were following a sound investment strategy, we realized more than we invested, and will return some of the proceeds to be distributed to those who lost."
But even as money from the Ponzi scheme is collected, some feel it is but a drop in the bucket. Although Picard has made clear that $20 billion is the amount investors originally placed with Madoff, some claim the amount is as much as $65 billion.
Tufts University lost $20 million. "Given the large number of investors, it's uncertain how this will affect any one party seeking recovery," said Kim Thurler, a Tufts spokeswoman. "We are continuing to pursue any options for recovery of our loss."
Sources:
Feds nab $7.2 billion for Madoff victims, CNN Money
Madoff Friend to Forfeit $625 Million; Mets Owner Sued, CNBC
Picower estate adds $7.2b to Madoff fund, The Boston Globe
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