Victims of Madoff Ponzi Scheme to Receive Millions More in Compensation

Source: The New York Times

WASHINGTON — Victims of Bernard L. Madoff, the architect of one of Wall Street’s largest frauds, will receive another $504 million, proceeds from assets that the government seized after Mr. Madoff’s financial firm collapsed a decade ago.

With this distribution, the second in a series of payouts, about 21,000 victims will have received a total of more than $1.2 billion, the Justice Department said. The payments were made by the Madoff Victim Fund, a government entity created to help people who lost money when Mr. Madoff’s long-running Ponzi scheme unraveled.

The government said it could return more than $4 billion to victims who lost their savings to Mr. Madoff and his firm, Bernard L. Madoff Investment Securities. But that number is still small compared with the imaginary profits the firm had promised investors and the real losses it incurred.

When Mr. Madoff confessed to his crime, he estimated that he had lost about $50 billion. Later estimated losses were even higher: about $65 billion in paper wealth and $17.5 billion in cash.

Mr. Madoff spent client money on family and friends, rather than investing it, and then took in money from additional clients to pay out early investors and cover up the fraud.



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