| NEW YORK
NEW YORK Victims of Bernard Madoff's Ponzi
scheme can expect to soon receive about $1.42 billion to help
cover their losses, after two U.S. judges on Wednesday
authorized the payouts.
In the first payout, customers who invested directly with
Madoff will receive about $1.18 billion from Irving Picard, the
trustee liquidating Bernard L. Madoff Investment Securities LLC.
Separately, former customers of J. Ezra Merkin, a New York
money manager who funneled their money to Madoff through his
Ariel and Gabriel Capital "feeder funds," will receive nearly
$236 million, court papers show.
The payouts were approved less than a month before the
seventh anniversary of Madoff's fraud being uncovered in
In a statement, Picard said U.S. Bankruptcy Judge Stuart
Bernstein in Manhattan on Wednesday authorized him to release
$1.5 billion from reserves.
Picard said $1.18 billion will go to former Madoff customers
in a payout expected to begin this year, with the remainder held
back pending the outcome of separate litigation over the fraud.
Individual distributions would range from $1,287 to $200.4
million, Picard has said.
Once the payout, Picard's sixth, is finished, eligible
recipients will have recouped about $9.13 billion.
This includes full payment on 1,264 of the 2,227 Madoff
accounts with valid claims, including everyone owed $1.16
million or less, the trustee said.
Picard has recovered or reached agreements to recover
roughly $10.91 billion, about three-fifths of the $17.5 billion
of principal he has said Madoff customers lost.
In the Merkin case, New York State Supreme Court Justice
Richard Lowe approved the nearly $236 million payment, the 10th
payout by Bart Schwartz, the Merkin funds' receiver.
Schwartz said the payout became possible after he settled
claims with Picard over the Madoff firm's estate.
It boosts the recovery by Merkin investors to more than $1.4
billion, the receiver said.
Picard's payout became possible after the U.S. Supreme Court
last month refused to hear an appeal by Madoff victims who
sought inflation and interest adjustments on sums they lost.
Lower courts had accepted Picard's decision not to grant
Madoff, 77, pleaded guilty to fraud in March 2009 and is
serving a 150-year prison term.