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 Investors who had withdrawn more than they had deposited in Madoff accounts had sued to challenge Picard’s formula.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!
  • Is pot kosher for Passover. The rabbis say no, especially for Ashkenazi Jews. And it doesn't matter if its the unofficial Pot Day of April 20.
  • A Ukrainian rabbi says he thinks the leaflets ordering Jews in restive Donetsk to 'register' were a hoax. But the disturbing story still won't die.
  • Some snacks to help you get through the second half of Passover.
  • You wouldn't think that a Soviet-Jewish immigrant would find much in common with Gabriel Garcia Marquez. But the famed novelist once helped one man find his first love. http://jd.fo/f3JiS
  • Can you relate?
  • The Forverts' "Bintel Brief" advice column ran for more than 65 years. Now it's getting a second life — as a cartoon.
  • Half of this Hillel's members believe Jesus was the Messiah.
  • Vinyl isn't just for hipsters and hippies. Israeli photographer Eilan Paz documents the most astonishing record collections from around the world:http://jd.fo/g3IyM
  • Could Spider-Man be Jewish? Andrew Garfield thinks so.
  • Most tasteless video ever? A new video shows Jesus Christ dying at Auschwitz.
  • "It’s the smell that hits me first — musty, almost sweet, emanating from the green felt that cradles each piece of silver cutlery in its own place." Only one week left to submit! Tell us the story of your family's Jewish heirloom.
  • Mazel tov to Chelsea Clinton and Marc Mezvinsky!
  • If it's true, it's pretty terrifying news.
  • “My mom went to cook at the White House and all I got was this tiny piece of leftover raspberry ganache."
  • 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.