A Bunch Of Bernie Madoff’s Ponzi Scheme Victims To Get $405 Million In Settlement

A recent settlement will see a group of Bernie Madoff’s victims in his Ponzi scheme receive $405 million. Clients of hedge fund manager J. Ezra Merkin, including New York Law School, Bard College, Harlem Children’s Zone, Homes for the Homeless and the Metropolitan Council on Jewish Poverty are included in the settlement. New York state will also get $5 million to cover the legal costs of the settlement.

Attorney General Eric Schneiderman worked out the settlement, and called it “a victory for justice and accountability.”

“Many New Yorkers entrusted their investments to Mr. Merkin, who then steered the money to Madoff while receiving millions of dollars in management and incentive fees,” Schneiderman said. “By holding Mr. Merkin accountable, this settlement will help bring justice for the people and institutions that lost millions of dollars.”

Merkin had managed hundreds of investors’ money in four different funds. Many investors are charitable organizations and others asked not to be identified, reports the Christian Science Monitor. Most will get more than 40% of their losses, but only up to $5 million.

Prosecutors say Merkin had concealed Madoff’s role by being not quite honest on documents and quarterly reports.

Previously in Madoff news: Madoff Victims Will Start Getting Refunds This Week 

Bernard Madoff victims to get $405M in settlement [Christian Science Monitor]

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  1. Blueskylaw says:

    It didn’t say in the article if the settlement money came from Merkin, his company, or insurance companies. It does seem that big and powerful “organizations” are getting more money back than small-time investors.

    • Usersname says:

      Would you expect anything else though? The “real” people will barely get anything I’m sure. I was also wondering where the money is coming from.

  2. Costner says:

    You know who really is benefiting from any recovery of funds for Madoff victims? You guessed it… the lawyers.

    Madoff trustee Irving Picard bills his personal services at $850 an hour. Per a report from earlier this year, (as of March 31, 2012), it is estimated that Picard has incurred roughly $554 million in administrative costs comprised of: $5.1 million in fees to Picard himself; $262.2 million in fees to his law firm, Baker & Hostetler LLP; and $31.7 million in general administrative costs.

    I suppose these people are lucky to get anything back… but $850 an hour for his attempts seems excessive considering 90% of his claims thus far have been tossed out or denied. Sheesh.

    http://dealbook.nytimes.com/2012/05/28/madoff-case-is-paying-off-for-trustee-850-an-hour/

    • tinmanx says:

      Damn it! I knew I should have studied harder and become a lawyer instead of a HTML monkey!

      But seriously, I just read a report that said the job market for law is so bad right now that 50% of law grads won’t find a job within 9 months of graduating. It takes a lot of work and luck to get to Mr. Picard’s level. Well, knowing the right people don’t hurt either.

  3. Coffee says:

    Is anyone else furious to learn that Homes for the Homeless has a hedge fund? I pine for halcyon days when the homeless lived under actual hedges. Today, they’ve got hedge funds and flying cars. It’s not fair!

  4. McRib wants to know if you've been saved by the Holy Clown says:

    All things considered, 40% recovery up to 5 million (and possibly more after that) is damned impressive.
    That’s good recovery for a Ponzi scheme.

  5. sp4rxx says:

    It’s not a win or justice if you don’t get all of your money back.

    They should have taken it straight from Bernie’s frozen assets (unfreezing them of course).