Victims of Bernie Madoff’s Ponzi scheme to receive final compensation of $131 million

Thousands of people defrauded by Bernard Madoff’s infamous Ponzi scheme will soon receive their final compensation payments, ending an effort that has spanned more than a decade. Madoff carried out the biggest financial scam in history, tricking people into believing they were making good investments when he was just using new investors’ money to pay old ones.

This latest payment of $131.4 million (around Rs 11,247 crore) brings the total disbursed through the Madoff Victims Fund (MVF) to $4.3 billion (around Rs 36,806 crore), according to a statement from the United States Department of Justice (DOJ). “Payments will be sent to more than 23,000 victims around the world. With this tenth distribution, more than 40,000 victims of the Madoff scheme will have recovered 93.71 percent of their fraud losses,” the Justice Department statement said.

The Department of Justice created the MVF to reimburse those defrauded by Madoff, who orchestrated the largest Ponzi scheme in history. The fund relied on multiple sources to raise the billions needed to pay victims. Notably, $2.2 billion (around Rs 18,829 crore) was recovered from the estate of Jeffry Picower, a Madoff investor who benefited from the scheme, while $1.7 billion (around Rs 14,550 crore) was obtained from through an agreement with JPMorgan Chase Bank.

Court documents and related legal proceedings have detailed how, for years, Bernard Madoff took advantage of his role as director of BLMIS, the investment firm he founded in 1960, to defraud his clients out of billions. On March 12, 2009, Madoff pleaded guilty to 11 federal charges and admitted that he had transformed his wealth management business into the largest Ponzi scheme in history, benefiting himself, his family, and his closest associates. He defrauded thousands of people, including charities, retirees and high-profile people such as Hollywood couple Kevin Bacon and Kyra Sedgwick, former Disney executive Jeffrey Katzenberg and baseball legend Sandy Koufax. Institutions such as New York University and the International Olympic Committee were also victims of his deception.

On June 29, 2009, Madoff was sentenced to 150 years in prison for orchestrating the most extensive fraud in history. Madoff died at the age of 82 in April 2021 in federal prison.

The consequences of Madoff’s fraud extended beyond financial devastation. At least four suicides have been linked to the scandal, including the death of Madoff’s eldest son, Mark, who took his own life. Madoff’s youngest son Andrew, who died of mantle cell lymphoma in 2014, believed the stress caused by his father’s crimes contributed to the return of his illness.