Madoff sons estates in $23 mln settlement over Ponzi scheme

Bernie Madoff is currently serving a 150 year sentence at the federal prison in Butner, NC for the $17.5 billion fraud.

Brendan Mcdermid—Reuters
Bernard Madoff exits the Manhattan federal court house in New York in this January 14

NEW YORK CITY – The trustee recouping money for Bernard Madoff’s victims has reached more than $23 million of settlements with the estates of the swindler’s late sons and related defendants, ending more than eight years of litigation.According to a Monday court filing, the settlement will strip the estates of Andrew and Mark Madoff of “all assets, cash, and other proceeds” of their father’s fraud, leaving them with a respective $2 million and $1.75 million.The estates also agreed to withdraw roughly $99.5 million of claims against the bankruptcy estate of the former Bernard L. Madoff Investment Securities LLC, the filing shows.Monday’s settlement resolves some the highest-profile cases remaining in trustee Irving Picard’s efforts to compensate former Madoff customers whom he estimates lost $17.5 billion. He has recovered $11.6 billion, or about two-thirds of that sum.The settlement also resolves claims against Mark Madoff’s widow, Stephanie Mack, and some entities affiliated with the Madoff family.It also ends an investigation by the U.S. attorney’s office in Manhattan, whose criminal probe resulted in a 150-year prison term for Bernard Madoff, who is serving that sentence at the federal prison in Butner, N.C. His brother Peter is also serving a 10-year sentence. Additional people involved faced 13 other convictions and guilty pleas.Madoff’s sons were never criminally charged and had maintained they knew nothing about their father’s fraud until he confessed to them shortly before his Dec. 11, 2008, arrest.But in a civil lawsuit, Picard said Madoff’s firm operated as a family piggy bank, and he sought to recoup $153.3 million from the sons’ estates alone.Settlement talks began in 2015, and the accord is a “global and complete resolution of all claims” against the estates, lawyers for Picard said in Monday’s filing.Mark Madoff committed suicide in December 2010 at age 46. Andrew Madoff died of cancer in September 2014 at age 48. Their father is 79.Lawyers for Picard could not immediately be reached for comment. Martin Flumenbaum, a lawyer for the Madoff sons’ estates, did not immediately respond to requests for comment. Alan Levine, a lawyer for Mack, declined to comment.A spokeswoman for acting U.S. Attorney Joon Kim in Manhattan said Kim’s office would have no comment until the settlement wins court approval. A hearing is scheduled for July 26.Richard Breeden, a former U.S. Securities and Exchange Commission chairman, oversees a separate $4 billion fund to compensate Madoff victims, including third parties. Payouts could begin as soon as October.