Madoff Victims Wait for Recouped Billions

Despite Successes, Legal Tangles Prevent Payouts Anytime Soon

Tangled Web: Billions have been recovered from Bernard Madoff’s Ponzi scheme. But legal tangles mean victims won’t see cash anytime soon.
getty images
Tangled Web: Billions have been recovered from Bernard Madoff’s Ponzi scheme. But legal tangles mean victims won’t see cash anytime soon.

By Josh Nathan-Kazis

Published July 01, 2012, issue of July 06, 2012.
  • Print
  • Share Share
  • Single Page

(page 2 of 3)

One Madoff victim contacted by the Forward, who received funds under the hardship program, said that he had recovered only $130,000 of his $400,000 investment.

“One was grateful to get anything back,” said the investor, Steven Falk of Oakland, Calif.

Falk has done better than most. Picard has approved $7 billion in claims by Madoff investors. But in his October 2011 distribution, Picard paid investors 4.6 cents on the dollar.

One barrier to distributing the billions in recovered funds fell on June 25, when the U.S. Supreme Court declined to hear a challenge to Picard’s theory that investors deserve to recoup only the amount they initially invested with Madoff. Investors who had withdrawn more than they had deposited in Madoff accounts had sued to challenge Picard’s formula. The decision by the Supreme Court not to take up their case signifies ultimate approval of that aspect of Picard’s distribution plan.

When the Supreme Court’s decision was made public, Picard’s office responded triumphantly, saying that they could now file for a further distribution of recovered assets.

But plenty of stumbling blocks remain. In the first place, separate challenges to the $5 billion recovered for Madoff victims in a December 2010 settlement with the widow of investor Jeffry Picower, probably the biggest winner in the Madoff fraud, means that those funds still may not be available for disbursement. One attorney challenging Picard over access to the funds told Bloomberg News that he planned to end his appeal, but he or others could still file until mid-July.

Even then, other potential challenges will require that substantial funds be held back. Some litigants argue that Picard should factor inflation and interest into his calculations of the actual value of Madoff investments. Picard disagrees. That litigation is ongoing, and Picard’s office will keep reserve funds out of the disbursement to pay any claims that may arise out of those lawsuits.

The disbursement itself will take time. The first time Picard distributed funds to investors, it took six months between the initial filing and the actual mailing of the checks. If Picard’s office files for a second distribution in the next few weeks, it could be mid-fall before investors receive the cash.


The Jewish Daily Forward welcomes reader comments in order to promote thoughtful discussion on issues of importance to the Jewish community. In the interest of maintaining a civil forum, The Jewish Daily Forwardrequires that all commenters be appropriately respectful toward our writers, other commenters and the subjects of the articles. Vigorous debate and reasoned critique are welcome; name-calling and personal invective are not. While we generally do not seek to edit or actively moderate comments, our spam filter prevents most links and certain key words from being posted and The Jewish Daily Forward reserves the right to remove comments for any reason.





Find us on Facebook!
  • Jon Stewart responds to his critics: “Look, obviously there are many strong opinions on this. But just merely mentioning Israel or questioning in any way the effectiveness or humanity of Israel’s policies is not the same thing as being pro-Hamas.”
  • "My bat mitzvah party took place in our living room. There were only a few Jewish kids there, and only one from my Sunday school class. She sat in the corner, wearing the right clothes, asking her mom when they could go." The latest in our Promised Lands series — what state should we visit next?
  • Former Israeli National Security Advisor Yaakov Amidror: “A cease-fire will mean that anytime Hamas wants to fight it can. Occupation of Gaza will bring longer-term quiet, but the price will be very high.” What do you think?
  • Should couples sign a pre-pregnancy contract, outlining how caring for the infant will be equally divided between the two parties involved? Just think of it as a ketubah for expectant parents:
  • Many #Israelis can't make it to bomb shelters in time. One of them is Amos Oz.
  • According to Israeli professor Mordechai Kedar, “the only thing that can deter terrorists, like those who kidnapped the children and killed them, is the knowledge that their sister or their mother will be raped."
  • Why does ultra-Orthodox group Agudath Israel of America receive its largest donation from the majority owners of Walmart? Find out here: http://jd.fo/q4XfI
  • Woody Allen on the situation in #Gaza: It's “a terrible, tragic thing. Innocent lives are lost left and right, and it’s a horrible situation that eventually has to right itself.”
  • "Mark your calendars: It was on Sunday, July 20, that the momentum turned against Israel." J.J. Goldberg's latest analysis on Israel's ground operation in Gaza:
  • What do you think?
  • "To everyone who is reading this article and saying, “Yes, but… Hamas,” I would ask you to just stop with the “buts.” Take a single moment and allow yourself to feel this tremendous loss. Lay down your arms and grieve for the children of Gaza."
  • Professor Dan Markel, 41 years old, was found shot and killed in his Tallahassee home on Friday. Jay Michaelson can't explain the death, just grieve for it.
  • Employees complained that the food they received to end the daily fast during the holy month of Ramadan was not enough (no non-kosher food is allowed in the plant). The next day, they were dismissed.
  • Why are peace activists getting beat up in Tel Aviv? http://jd.fo/s4YsG
  • Backstreet's...not back.
  • from-cache

Would you like to receive updates about new stories?




















We will not share your e-mail address or other personal information.

Already subscribed? Manage your subscription.