| NEW YORK
NEW YORK May 13 The overseer of a U.S. fund to
compensate victims of Bernard Madoff's Ponzi scheme on Tuesday
said he has received roughly 51,700 claims seeking to recoup
more than $40 billion, both totals far higher than expected.
Richard Breeden, a special master appointed by the U.S.
Department of Justice to oversee the $4.05 billion Madoff Victim
Fund, said it appeared at least twice as many investors as
previous thought lost money in Madoff's fraud.
He said he expects to deem a "substantial" number of claims
ineligible, duplicative or inflated, and that it was too soon to
provide a timetable for distributions. Claimants came from 119
countries as disparate as Kazakhstan, Madagascar and Vietnam.
"The volume was surprisingly large," Breeden, a former
chairman of the U.S. Securities and Exchange Commission, said in
a phone interview. "The fact we have victims in 119 countries
makes this a very unique process. I can't think of any situation
where there has been such a widespread distribution of a fraud."
Breeden is allowing "indirect" investors who had accounts at
so-called "feeder funds," hedge funds, banks and other entities
that sent their money to Madoff to try to recoup their losses.
In contrast, Irving Picard, a court-appointed bankruptcy
trustee winding down Bernard L. Madoff Investment Securities
LLC, has allowed only direct investors to recover.
Picard has recouped $9.8 billion, roughly 56 percent of the
$17.5 billion in principal he said was lost by those who
submitted claims, and distributed nearly $6 billion. The trustee
said he accepted 2,518 of the 16,519 claims he received.
Breeden said he received more than 43,500 claims ahead of an
April 30 deadline from people who did not file claims in the
bankruptcy case, and more than 36,000 from people who said they
have recouped none of their losses.
He said the United States accounted for 58 percent of
claimed losses and 38 percent of claimants, with Germany, Italy
and France providing the next most claimants. About 78 percent
of claimants reported losses of $500,000 or less.
Breeden said claims would be reviewed one at a time, and
that a different law allows him to compensate a wider range of
victims than Picard.
"Our first distribution will go to people who have recovered
very little or nothing," he said. "Our message is, there is hope
here. Help is coming, if you meet the eligibility standards."
Picard was not immediately available for comment.
About $1.7 billion of Breeden's fund came from JPMorgan
Chase & Co, which was Madoff's bank for two decades,
and$2.2 billion came of the estate of Jeffry Picower, a Florida
investor who benefited from Madoff's scheme. Picower's estate
paid another $5 billion to Picard.
Madoff, 76, was arrested in December 2008, pleaded guilty
three months later, and is now serving a 150-year prison term.
(Reporting by Jonathan Stempel in New York; editing by Andrew