US begins distributing $770 million to Madoff victims

(JTA) — The U.S. Department of Justice began distributing $772.5 million in recovered funds to some 24,000 victims of Bernie Madoff’s Ponzi scheme.

The sum, which is being returned eight years after the former stockbroker and investment adviser pleaded guilty to committing one of the largest fraud schemes in U.S. history, is the largest restoration of forfeited property in the United States, according to Deputy U.S. Attorney General Rod Rosenstein.

“We have recovered billions of dollars from third parties – not Mr. Madoff – and are now returning that money to tens of thousands of victims,” Rosenstein said in a statement issued Thursday.

The $772.5 million is only a fraction of the more than $4 billion in assets that were recovered for the victims in total, according to the statement.

Madoff, a Jewish New Yorker, used his position as the chairman of Bernard L. Madoff Investment Securities to swindle billions of dollars from tens of thousands of people from the early 1970s until his 2008 arrest. Many prominent nonprofits also suffered big losses, with Yeshiva University taking a $140 million hit, Hadassah $90 million and the foundation of Elie Wiesel losing $15 million.

In 2009, Madoff pleaded guilty to 11 federal felonies and was sentenced to 150 years in prison. He was also ordered to forfeit nearly $171 billion, according to CNBC.

Of the $4 billion that will be distributed to victims of the scheme, more than half came from the estate of Jeffry Picower, a Madoff investor who reportedly profited more than Madoff from the Ponzi scheme and was later sued by Madoff investors.

Another $1.7 billion was collected as part of an agreement with JPMorgan Chase Bank, according to the Justice Department’s release. JPMorgan Chase was fined under the Bank Secrecy Act, which requires banks to notify law enforcement of suspicious activity, CNBC reported.