Madoff fraud victims receive $4.3 billion as fund completes payout
The fund created by the US government to help compensate victims of late fraudster Bernard Madoff has started the final round of payments, according to a statement from the Department of Justice (DOJ).
The value of the payout being made by the Madoff Victim Fund (MVF) is $131.4 million (£104.6 million) and will bring the total amount awarded to 40,930 claimants to $4.3 billion.
Madoff, a Wall Street financier, fell into infamy after admitting to one of the largest frauds in American financial history. died in prison in 2021,
He was serving a 150-year sentence after pleading guilty in 2009 to running a so-called Ponzi scheme that paid investors money from new clients rather than actual profits.
Richard C. Breeden, who runs MVF, said, “MVF’s distribution compensated for one of the most horrific financial crimes ever committed.”
Mr. Breeden is the former Chairman of the US financial regulator, the Securities and Exchange Commission (SEC).
“We have helped thousands of victims reach the greatest recoveries we could have achieved,” he said.
Madoff’s victims were a mix of wealthy individuals, less affluent people, and companies – both large and small – as well as schools, charities and pension funds.
The MFV estimates that it will have recovered approximately 94% of proven victim losses upon completion of its mission in 2025.
Another $14.7 billion has been returned to Madoff clients through bankruptcy proceedings.
Madoff’s investment firm collapsed during the 2008 financial crisis.
Founded in 1960, Bernard L. Madoff Investment Securities 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 firm was investigated by the SEC eight times because it delivered extraordinary returns.
But it was the global recession that caused the company to shut down as recession-hit Madoff investors tried to withdraw nearly $7 billion and could not find the money to cover it.
The list of scammers includes actor Kevin Bacon, Hall of Fame baseball player Sandy Koufax and film director Steven Spielberg’s charitable foundation, Wunderkinder.
UK banks were also among those that lost money, with HSBC Holdings saying it had an exposure of about $1 billion. Other corporate victims were Royal Bank of Scotland and Man Group and Japan’s Nomura Holdings.
