Ponzi scheme victims see no light as legal tangles prevent payouts
As attorneys come closer to achieving $400m payout, another court decides not to hear an appeal on the way recovered Madoff funds are being distributed.
Three and a half years later, victims of Bernard Madoff’s massive financial fraud are still waiting to get back their money. Billions already recovered are tied up in litigation, and despite recent advances, there’s no resolution in sight.
Attorneys came a few steps closer to digging out of the financial chasm Madoff left behind when, on June 25, Madoff feeder-fund manager J. Ezra Merkin agreed to pay $400 million to his former investors in a settlement with the New York State Attorney General. The same day, the U.S. Supreme Court decided not to hear an appeal challenging the way court-appointed trustee Irving Picard was disbursing other recovered Madoff funds.
The two developments should free up more money for victims. But in an illustration of the exceptional, time-consuming complexity of the case, both the settlement and the Supreme Court’s decision will take months, if not years, to put cash in victims’ pockets.
Peter Madoff, the younger brother of Bernard Madoff, surrendered himself Friday morning at his lawyer’s office in midtown Manhattan ahead of an expected guilty plea to criminal charges related to the Ponzi scheme.