$7.2B In Bogus Profits Heading To Madoff Victims

Victims of Bernie Madoff's Ponzi scheme scored a major victory Friday. The estate of one of Madoff's biggest investors agreed to return $7.2 billion that had been withdrawn from Madoff funds before the collapse. The money will be used to compensate investors who lost an estimated $20 billion.

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From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

ROBERT SIEGEL, host:

And I'm Robert Siegel. The victims of Bernard Madoff's Ponzi scheme finally got some good news today: U.S. officials say they have recovered more than $7 billion from the estate of one man, one of Madoff's biggest investors.

The money belonged to Jeffry Picower, who died of a fatal heart attack in his Palm Beach swimming pool more than a year ago. The money will go to compensate those who lost out when Madoff's investment firm collapsed. NPR's Jim Zarroli reports.

JIM ZARROLI: The $7.2 billion payout represents the largest forfeiture in law-enforcement history, and U.S. attorney Preet Bharara said today that it will quadruple the amount of money that authorities have recovered on behalf of Madoff's victims.

Mr. PREET BHARARA (U.S. Attorney, Southern District of New York): We have seized and forfeited every piece of tainted property possible, from cash to real estate to personal property. And today, we add $7.2 billion to that effort.

ZARROLI: Bharara refused to say much about Picower himself or his role in the Madoff scandal. Picower was an accountant and longtime friend of Madoff who ran one of the feeder funds that funneled investors' money into his film. He was never charged with any crime.

But in recent months, U.S. officials have been pursuing some of Madoff's investors who got payouts from the firm over the years, and few got as much as Picower did.

Picower's widow agreed to surrender the money, though she continues to insist her late husband played no role in the fraud.

Whatever the truth, U.S. officials were pleased to have so much additional money for victims.

Janice Fedarcyk directs the FBI's New York field office.

Ms. JANICE FEDARCYK (Director, New York Field Office, Federal Bureau of Investigation): Today is a good day for a group of people who haven't had much cause for optimism.

ZARROLI: With today's payout, officials have collected some $10 billion for victims. The trustee appointed by federal bankruptcy court says that's about half of the money invested with Madoff over the years.

Rob Stein is president of Network for Investor Action and Protection, which represents Madoff victims. And he applauded the settlement.

Mr. ROB STEIN (President, Network for Investor Action and Protection): It's great. It's about time. This has been something that's been needed for a long time.

ZARROLI: But Stein says many Madoff investors remain frustrated by the slow pace of the compensation effort. More than two years after Madoff's arrest, many of his victims, especially retirees, are still struggling to survive financially. They now stand to get back at least 50 cents for each dollar that they lost. And those payouts could start as early as next month.

Jim Zarroli, NPR News, New York.

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