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Madoff Investor Agrees To Hand Over $7.2 Billion

The fund created to recover money for investors who were defrauded by Bernard Madoff has reached a $7.2 billion settlement with the estate of the single-largest beneficiary of the fraud.

Bernard Madoff walks out of federal court in New York City after a bail hearing Jan. 5, 2009.

Bernard Madoff in 2009 Hiroko Masuike/Getty Images hide caption

itoggle caption Hiroko Masuike/Getty Images

The deal with the estate of Florida philanthropist and businessman Jeffry Picower was detailed in court documents filed Friday and announced at a news conference in New York City. Irving Picard, the court-appointed trustee charged with clawing back as much money as possible for Madoff's victims, was among those at the announcement.

Picower drowned after suffering a heart attack in the swimming pool of his Palm Beach, Florida, mansion on in October 2009.

The NYT's Dealbook says the settlement is a major boost to Picard's efforts:

The $7.2 billion will greatly expand the $2.3 billion sum that the trustee, Irving H. Picard, had already collected through asset sales and other settlements in the Madoff bankruptcy. The amount represents the difference between the cash that Mr. Picower put into his Madoff account and the amount that he withdrew over the life of the fraud, according to litigation filed last year by Mr. Picard.

Nathan Vardi over at Forbes says there may well be money left over in Picower's estate to fulfill his bequests and philanthropic wishes:

The bulk of what’s left in Picower’s estate–everything in excess of the $7.2 billion settlement and $250 million of bequests–is slated for the new and as yet unnamed tax-exempt foundation that is supposed to allocate half of the funds for medical research and the rest for charitable purposes. It appears that Barbara, 67, will resume her life as a philanthropic heavyweight as chairwoman.

Picower's wife, Barbara, said in a statement accompanying the settlement that her husband was "in no way complicit" with the Madoff fraud and that his estate would "return every penny received" through Madoff.

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