Thousands of people defrauded by Bernard Madoff's infamous Ponzi scheme will soon receive the final instalment of their compensation, ending an effort that has spanned over a decade. Madoff ran the biggest financial scam in history, tricking people into thinking they were making good investments when he was just using new investors' money to pay the old ones.
This last payment of $131.4 million (around Rs 11,247 crore) pushes the total disbursed through the Madoff Victim Fund (MVF) to $4.3 billion (around Rs 36,806 crore), according to a statement by the US Department of Justice (DOJ). "Payments will be sent to more than 23,000 victims across the globe. With this 10th distribution, over 40,000 victims in the Madoff scheme will have recovered 93.71 per cent of their fraud losses," the DOJ statement said.
The DOJ established the MVF to reimburse those defrauded by Madoff, who orchestrated the largest Ponzi scheme in history. The fund relied on multiple sources to collect the billions necessary to repay victims. Notably, $2.2 billion (around Rs 18,829 crore) was recovered from the estate of Jeffry Picower, a Madoff investor who benefitted from the scheme, while $1.7 billion (around Rs 14,550 crore) came through an agreement with JPMorgan Chase Bank.
Court filings and related legal proceedings have detailed how, for years, Bernard Madoff exploited his role as the head of BLMIS, the investment firm he founded in 1960, to defraud his clients of billions. On March 12, 2009, Madoff pleaded guilty to 11 federal charges, admitting that he had transformed his wealth management business into the largest Ponzi scheme ever, benefiting himself, his family and close associates. He swindled thousands, including charities, retirees, and high-profile individuals such as Hollywood couple Kevin Bacon and Kyra Sedgwick, former Disney executive Jeffrey Katzenberg, and baseball legend Sandy Koufax. Institutions like New York University and the International Olympic Committee also fell victim to his deceit.
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 at a federal prison.
The fallout from Madoff's fraud extended beyond financial devastation. At least four suicides have been linked to the scandal, including the death of Madoff's elder son Mark, who took his own life. Madoff's younger 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.
