Jeffry Picower's widow reaches deal to return Madoff fraud money, marking largest settlement secured by trustee
The estate of one of Bernard Madoff's closest friends has agreed to hand back $7.2bn (�4.6bn) to the fraud king's victims.
The agreement was announced today by Irving Picard, the trustee representing victims, and the US attorney's office in Manhattan. It is by far the largest settlement to date and means Picard has now recovered close to half the money he believes Madoff stole.
The billionaire Jeffry Picower is believed to have been the biggest single beneficiary of Madoff's decades-long scam. In one year he received a 950% return on the money he invested with Madoff, according to Picard. In other years his returns ranged from 120% to 550%.
Picower and Madoff had been close for 35-years and the Florida-based philanthropist was initially viewed as a victim of the fraud. Picower, his charitable foundation and related entities withdrew $7.2bn from Madoff's firm over 20 years, including $2.4bn in the six years before Madoff's arrest, according to Picard. Under the agreement, Picard will receive $5bn from Picower's estate and the US government will get $2.2bn. All the money will eventually be paid to Madoff's victims.
Picower was found dead in the swimming pool of his home in Palm Beach, Florida, in October last year. He had been in poor health and suffered from Parkinson's and heart-related health issues.
The settlement follows months of negotiations with Picower's widow, Barbara. In a statement she said her husband was "in no way complicit" with Madoff's fraud. She said the estate would "return every penny received" through Madoff investments.
"I am absolutely confident that my husband Jeffry was in no way complicit in Madoff's fraud and want to underscore the fact that neither the trustee nor the US attorney has charged him with any illegal conduct," she said. "I believe that the Madoff Ponzi scheme was deplorable, and I am deeply saddened by the tragic impact it continues to have on the lives of its victims. It is my hope that this settlement will ease that suffering."
David Sheehan, Picard's legal adviser, said: "Mrs Picower is to be commended for coming forward and returning every cent she received from [Bernard Madoff Investment Securities] to the trustee and the US attorney.
"Those who have received other people's money, irrespective of their knowledge of the fraud, should return the monies to the trustee for payment to those Madoff customers with valid claims who have recovered little or none of their original deposits," said Sheehan.
"Mrs Picower embraced this concept and has set the appropriate high standard going forward."
Preet Bharara, the US attorney in Manhattan, called the agreement "a truly historic settlement" and a "game changer for Madoff's victims".
The settlement brings the amount of funds recovered by Picard to about $10bn. Earlier this month, the family of Carl Shapiro, another old friend of Madoff's, agreed to pay Picard $625m in settlement. Over recent weeks the trustee has filed suits against a host of people and firms he says benefited from the fraud including Citigroup, HSBC and JP Morgan Chase.
Madoff is serving a 150-year sentence after pleading guilty to carrying out the decades-long fraud scheme.
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