Madoff fraud victims to receive $4.3 billion as fund completes payouts

A fund set up by the US government to help victims of late fraudster Bernard Madoff has begun its latest round of payments, the Department of Justice (DoJ) said in a statement.

The payments, made by the Madoff Victims’ Fund (MVF), total $131.4m (£104.6m) and are set to bring the total it has handed out to 40,930 claimants to $4.3bn.

Madoff, the Wall Street financier who was disgraced after admitting to one of the largest frauds in US financial history, died in prison in 2021.

He served as 150-year sentence after pleading guilty in 2009 to running a so-called Ponzi scheme that paid investors with money from new customers rather than actual profits.

“The distribution of MVF paid for one of the most heinous financial crimes ever committed,” said Richard Breeden, who runs MVF.

Mr. Breeden is the former chairman of the US financial regulator, the Securities and Exchange Commission (SEC).

“We have brought tens of thousands of victims to the greatest possible recovery,” he added.

Madoff’s victims were rich people, less fortunate people and companies – both large and small – as well as schools, charities and pension funds.

The MFV estimates that when it completes its mission in 2025, it will cover nearly 94% of proven casualty losses.

Another $14.7 billion was returned to Madoff’s clients through bankruptcy proceedings.

Madoff’s investment company collapsed during the 2008 financial crisis.

Bernard L. Madoff Investment Securities, founded in 1960, became one of Wall Street’s largest market makers, matching buyers and sellers of stocks, and Madoff served as chairman of the Nasdaq stock trading platform.

Over the years, the SEC has investigated the company eight times because of its exceptional returns.

But it was the global recession that caused the firm’s demise, when Madoff’s recession-hit investors tried to withdraw about $7 billion and he couldn’t find the money to cover it.

The list of fraudsters includes actor Kevin Bacon, Hall of Fame baseball player Sandy Koufax and film director Steven Spielberg’s Kindergarten charity.

British banks were also among those who lost money, with HSBC Holdings saying it was about $1 billion in profits. Other corporate victims were Royal Bank of Scotland and Man Group and Japan’s Nomura Holdings.