Madoff fraud victims get $4.3bn as fund completes payouts
2024-12-31
Category: economic

A 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 Victim 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.Madoff's investment firm collapsed during the 2008 financial crisis.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.But it was the global recession which prompted the firm's demise as Madoff investors, hit by the downturn, tried to withdraw about $7bn and he could not find 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 Bank of Scotland and Man Group and Japan's Nomura Holdings.