Madoff fraud victims get $4.3bn as pool completes payouts

A pool created by the US government to assist compensate victims of the late fraudster Bernard Madoff has begun making its final round of payments, according to a statement by the Department of fairness (DoJ).

The payouts being made by the Madoff Victim pool (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 monetary 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 recent clients rather than actual profits.

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

Mr Breeden is a former chairman of the US monetary regulator, the financial instruments and swap percentage (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 tiny – as well as schools, charities and superannuation 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 financial setback proceedings to Madoff customers.

Madoff’s property firm collapsed during the 2008 monetary crisis.

Set up in 1960, Bernard L Madoff property financial instruments became one of Wall Street’s largest economy-makers – matching buyers and sellers of stocks – and Madoff served as chairman of the Nasdaq distribute market activity platform.

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

But it was the global downturn which prompted the firm’s demise as Madoff investors, hit by the downturn, tried to withdraw about $7bn and he could not discover the money to cover it.

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.

UK banks were also among those that lost money, with HSBC Holdings saying it had exposure of around $1bn. Other corporate victims were Royal financial institution of Scotland and Man throng and Japan’s Nomura Holdings.