NEW YORK — More than 10,000 people whose indirect investments with Bernard Madoff made them ineligible for billions of dollars recovered so far by a trustee can make claims against a $2.35 billion fund created through government forfeitures, a prosecutor said Monday.
Manhattan U.S. Attorney Preet Bharara said those who invested with Madoff through feeder funds, investment groups and other pooled investment vehicles will be eligible for money recovered mostly from the estate of deceased Madoff investor Jeffry Picower. He was a close Madoff associate who drowned in 2009 after suffering a heart attack in the swimming pool of his Palm Beach, Fla., mansion.
A civil forfeiture recovery agreement with the Picower estate was announced in December 2010, providing $2.2 billion of the $2.35 billion. Other money was collected through other civil forfeiture actions, including against members of the Madoff family.
“The process we have put in place opens the door for thousands of defrauded victims who otherwise might never have recovered anything,” Bharara said. “We have made eligibility to recover far more inclusive, and more equitable, than ever before.” Claims to the money must be made by Feb. 28.
The Madoff fraud was revealed five years ago when Madoff ran out of money to continue a multi-decade scheme that lost about $20 billion of investor money. Madoff, 75, is serving a 150-year prison term.
Court rulings have prevented indirect investors in Madoff’s investment business from accessing some of the more than $9 billion recovered so far by Madoff trustee Irving Picard.