The firm responsible for paying out $4 billion to victims of Bernard Madoff’s Ponzi scheme has been spending millions on related billings, including the retention of a Victim Fund administrator, over the past four years. Victims haven’t seen a dime.
According to Bloomberg News, Madoff, 79, pleaded guilty to fraud in 2009 and is serving a 150-year sentence. His victims lost a combined $17.5 billion in principal, though their final account statements totaled about $64 billion, including profit from bogus trades.
The Victim Fund Administrator, Richard Breeden, former chairman of the U.S. Securities and Exchange Commission, wrote on the firm’s website that they expected the initial distributions to take place in 2017 and to be larger than expected.
Previously, Breeden had estimated that as many as 40,000 would receive their first payments by the end of 2016, and, before that, his website said the claims approval process was moving along, with resolution on the near horizon. Obviously neither of those things happened, and it seems no one’s holding their breath that it’ll pan out this time, either.
Meanwhile, victims feel like they’re being victimized all over again.
“It’s very frustrating that people are making money off us like this, using money that was recovered for victims,” said Daphne Brogdon, a Food Network personality, whose family lost about $5 million in the Madoff scam.
Jon Barooshian, an impartial Bowditch & Dewey defense lawyer, said it might not be Breeden’s fault.
“It might be more of an internal DOJ issue,” said Barooshian.
He said the Justice Department often takes its time making decisions about forfeited assets. $1.7 billion of the fund came out of a forfeiture deal with JPMorgan Chase & Co., Madoff’s bank, which was accused of turning a blind eye to the scam.
Another $2.4 billion came from the estate of Jeffry Picower, now deceased, one of Madoff’s biggest investors.
So far, Breeden’s firm has racked up $38.8 million in billings.