Madoff Trustee Says 15,400 Claims Were Filed

Madoff Trustee Says 15,400 Claims Were Filed

July 9, 2009, 4:23 PM

From Diana Henriques, a DealBook colleague:

The final tally of claims from victims of Bernard L. Madoff’s vast Ponzi scheme comes to more than 15,400, up from 8,800 claims filed at the end of June, according to an update provided on Thursday to the federal bankruptcy court in Manhattan.

The total was pushed up by a last-minute flood of applications just before a July 2 deadline, according to the new report, which was filed by Irving H. Picard, the trustee overseeing the claims process. Until those last two days, the number of claims had remained nearly unchanged for months.

The claims tally adds a new metric to the enormous fraud, which was already remarkable for the amount of paper profits wiped out ($64.8 billion), the amount of cash that flowed through the Ponzi scheme since its inception ($170 billion) and the number of years the fraud continued undetected (nearly 30, according to the government prosecutors). On June 29, Mr. Madoff was sentenced to 150 years in prison for his crimes.

The update from the trustee also detailed his effort to recover assets to help compensate Mr. Madoff’s victims. Mr. Picard’s firm, Baker Hostetler, has filed eight lawsuits aimed at reclaiming $13.7 billion from investors who withdrew the money shortly before the fraud collapsed with Mr. Madoff’s arrest in December.

While the report chiefly summarized actions by the trustee that had already become public, it also provided some details about the steps the trustee’s team took in the immediate aftermath of the arrest. These included the investigation and completion of trades already in progress at Mr. Madoff’s legitimate brokerage firm, Bernard L. Madoff Investment Securities, and the identification and consolidation of nearly a dozen bank accounts containing cash assets of nearl $580 million.

The trustee also reported the return of more than $144,000 in donations from Mr. Madoff and his firm to various political campaigns, including the Democratic Senatorial Campaign Committee and a political action committee for the securities industry.

The deadline for filing claims was midnight July 2.

Through the end of June, the trustee’s legal and administrative expenses totaled just under $46 million. The expenses will be fully paid by the Securities Investors Protection Corporation without tapping any of the money available to pay customer claims. In addition, S.I.P.C. has advanced $168.4 million to the trustee to cover up to $500,000 in compensation payments to victims whose claims have been approved.

Madoff Trustee’s First Interim Report