A fund established by the US government to help compensate victims of the late fraudster Bernard Madoff has begun making its final round of payments, according to a statement from the Department of Justice (DoJ).
Payouts made by the Madoff Victim Fund (MVF) total $131.4 million (£104.6 million) and are expected to bring the total amount paid to 40,930 claimants to $4.3 billion.
Madoff, a Wall Street financier disgraced after admitting to one of the biggest frauds in U.S. financial history, died in prison in 2021.
He was serving a 150-year prison sentence after pleading guilty in 2009 to running a so-called Ponzi scheme, which paid investors with money from new clients rather than actual profits.
“The MVF distributions compensate for one of the most monstrous financial crimes ever committed,” said Richard C Breeden, who heads the MVF.
Mr Breeden is a 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 a mix of wealthy individuals, less well-off people and businesses – large and small – as well as schools, charities and pension funds.
The MFV estimates that at the end of its mission, in 2025, it will have recovered nearly 94% of the victims’ proven losses.
Another $14.7 billion was returned to Madoff clients in bankruptcy proceedings.
Madoff’s investment company collapsed during the 2008 financial crisis.
Established in 1960, Bernard L Madoff Investment Securities became one of Wall Street’s largest market makers – connecting buyers and sellers of stocks – and Madoff served as president of stock trading platform Nasdaq.
Over the years, the company was investigated eight times by the SEC for achieving exceptional returns.
But it was the global recession that brought about the company’s demise, as Madoff’s recession-hit investors tried to cash out about $7 billion and couldn’t come up with the money to cover them.
The list of victims included actor Kevin Bacon, Hall of Fame baseball player Sandy Koufax and director Steven Spielberg’s charitable foundation, Wunderkinder.
British banks were also among those to lose money, with HSBC Holdings saying it had an exposure of around $1 billion. Other victim companies were the Royal Bank of Scotland, Man Group and Japanese company Nomura Holdings.
