February 9, 2015 / 5:08 PM / in 3 years

Payout to Madoff victims tops $7.2 billion

NEW YORK (Reuters) - The trustee liquidating Bernard Madoff’s firm on Monday said he is distributing another $355.8 million to the swindler’s victims, bringing the total payout to more than $7.2 billion.

Bernard Madoff (R), who confessed to defrauding investors of 50 billion dollars, arrives home after a hearing at Federal Court, in New York, January 5, 2009. REUTERS/Chip East

Irving Picard, the trustee, said the payout began on Feb. 6, and covers claims by fraud victims with 1,077 accounts at the former Bernard L. Madoff Investment Securities LLC. Claimants will receive between $431 to $67.1 million.

Most of the payout comes from November settlements with the Herald, Primeo and Senator “feeder funds,” which Picard accused of sending customer money to Madoff to further his Ponzi scheme.

The trustee said claimants on 1,160, or 52 percent, of the 2,216 accounts where he found valid claims have been fully paid.

Madoff, 76, is serving a 150-year prison term after pleading guilty to running a decades-long fraud that was uncovered in December 2008.

The $7.2 billion payout includes $823.7 million advanced by the Securities Investor Protection Corp, which helps liquidate failed brokerages.

Picard has recouped roughly $10.55 billion for Madoff victims, or about 60 percent of the estimated $17.5 billion of principal he estimates they lost.

Some of that money has been held back because of pending litigation, including by former Madoff customers who challenge Picard’s authority to block their competing claims.

Picard has filed more than 1,000 lawsuits against feeder funds, and former customers he has labeled “net winners” because they took out more from Madoff’s firm than they put in.

Through Sept. 30, 2014, law firms, consultants and other professionals had billed $1.01 billion in fees and expenses to recoup money for Madoff’s victims, court papers show.

Federal bankruptcy judges have so far approved more than $601 million of payments, largely comprising fees, to Picard’s law firm Baker & Hostetler.

Former U.S. Securities and Exchange Commission Chairman Richard Breeden oversees a separate $4.05 billion fund to compensate customers and third parties who lost money because of Madoff.

Reporting by Jonathan Stempel in New York

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