Madoff sons' estates in $32 million settlement over Ponzi scheme

Madoff sons' estates in $32 million settlement over Ponzi scheme
Bernard Madoff (R), who confessed to defrauding investors of US$50 billion (S$69 billion) dollars, arrives home after a hearing at Federal Court, in New York, in this file photo from January 5, 2009.
PHOTO: Reuters

The trustee recouping money for Bernard Madoff's victims has reached more than US$23 million (S$32 million) of settlements with the estates of the swindler's late sons and related defendants, ending more than eight years of litigation.

According to a Monday court filing, the settlement will strip the estates of Andrew and Mark Madoff of "all assets, cash, and other proceeds" of their father's fraud, leaving them with a respective US$2 million and US$1.75 million.

The estates also agreed to withdraw roughly $99.5 million of claims against the bankruptcy estate of the former Bernard L. Madoff Investment Securities LLC, the filing shows.

Monday's settlement resolves some the highest-profile cases remaining in trustee Irving Picard's efforts to compensate former Madoff customers who he estimates lost US$17.5 billion.

He has recovered US$11.6 billion, or about two-thirds of that sum.

The settlement also resolves claims against Mark Madoff's widow, Stephanie Mack, and some entities affiliated with the Madoff family.

It also ends an investigation by the US Attorney's office in Manhattan, whose criminal probe resulted in a 150-year prison term for Bernard Madoff, a 10-year term for his brother Peter, and 13 other convictions and guilty pleas.

Madoff's sons were never criminally charged, and had maintained they knew nothing about their father's fraud until he confessed to them shortly before his Dec. 11, 2008 arrest.

But in a civil lawsuit, Picard said Madoff's firm operated as a family piggy bank, and sought to recoup US$153.3 million from the sons' estates alone.

Settlement talks began in 2015, and the accord is a "global and complete resolution of all claims" against the estates, lawyers for Picard said in Monday's filing.

Mark Madoff committed suicide in December 2010 at age 46. Andrew Madoff died of cancer in September 2014 at age 48. Their father is 79.

Lawyers for Picard could not immediately be reached for comment. Martin Flumenbaum, a lawyer for the Madoff sons'estates, did not immediately respond to requests for comment. Alan Levine, a lawyer for Mack, declined to comment.

The office of Acting US Attorney Joon Kim in Manhattan had no immediate comment.

A separate US$4 billion fund overseen by former US Securities and Exchange Commission Chairman Richard Breeden expects this year to begin payouts to Madoff victims, including third parties.

 

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