Untangling Madoff's 'Winners' And Losers Court-appointed attorney Irving Picard is facing an uphill battle as he tries to recover money from those who came out of Bernard Madoff's Ponzi scheme as winners. With lawsuits pending to recover $17 billion, Picard hopes to return more than 50 cents on the dollar to the many losers.

Untangling Madoff's 'Winners' And Losers

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: Mr. Picard joins us now from Oxon Hill, Maryland, where he's attending a meeting of the Association of Certified Fraud Examiners. Welcome to the program.

M: Thank you.

: And in your most recent report to the bankruptcy court, you wrote that you recovered about $1 and a half billion. Before Madoff's investment business collapsed, it claimed accounts totaling about $65 billion - perhaps an inflated number. Have you been able to determine just how much money investors had with Madoff?

M: We've been using as a working number somewhere between 18 and $20 billion that had been deposited when the doors closed on December 11th, 2008.

: And how much of that money do you reasonably hope to recover?

M: I learned a long time ago that I don't speculate on those things. My aim is to collect as much as possible. I'm hopeful that we can return upwards of 50 cents - or even more - on the dollar to people.

: But why should someone who invested with Madoff in good faith, made some money, paid taxes on it and is now, say, living in retirement on those earnings, why should that person's assets be clawed back?

M: And the bankruptcy code provides a mechanism for a bankruptcy trustee. It's called avoidance actions, to get back some of those funds to redistribute them to the people who lost money. We're talking here about fictitious profits, and somebody being paid with other people's money.

: So if I had put $50,000 in with Madoff 15 years ago, and I looked at my eye-popping sums every time - when I got a statement from him, what I would be compensated, the amount I would be compensated to today would be the $50,000.

M: If you hadn't taken out any other money, that is correct.

: How cooperative are you finding the winners whom you've been trying to reclaim money from?

M: Well, we've sent out hundreds of letters, and we've gotten very few, if any, responses.

: The longer you do this and the more you learn about Madoff's investment business, are you more impressed with how easy it was for one to believe in his successes as an investor? Or are you more incredulous that one could've not seen through the returns that...

M: I would say that I'm more incredulous.

: More incredulous. People should've known, seeing what they were...

M: Well, I think there were lots of - what us lawyers call red flags that people should've picked up on, and that's why we think that many of these people, especially ones that we've already sued, are in a category of should have known.

: We report on your doings often here, and it's good to talk to you at last. But I just wonder, when we speak of Irving Picard trustee, is there entire - a department of Baker and Hostetler - do you have a huge staff that's working on this? How many people are actually working on it?

M: I have lawyers in some of the foreign countries. We brought litigation in some of the foreign countries. We've been able to free something like $200 million in Gibraltar and British Virgin Islands, the Caymans, and a couple of other places. This isn't just a little case, or a case that's solely situated in the southern district of New York.

: Is this the balance of your career - being a Madoff trustee?

M: Um, it very well could be.

: Well, we hope you'll talk to us again about it at some point.

M: It would be my pleasure.

: Irvin Picard, the trustee in the Madoff bankruptcy. Thank you very much for talking with us.

M: My pleasure.

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