Victims of fraudster Bernard Madoff may soon be in line for some compensation.
Irving Picard (above), the trustee seeking money for Madoff’s former customers, has reached an agreement with the U.S. Internal Revenue Service (IRS) to recover $326 million – that’s the sum that was previously transferred to the agency by Madoff’s firm, supposedly on behalf of foreign account holders.
Once the settlement money is recovered, some of Madoff’s victims with valid claims will be compensated. Says Picard:
“I believe that the payments made to the IRS falsely identified the funds as income tax withholding in order to give the investment advisory arm of Bernard L. Madoff Investment Securities LLC (BLMIS) an air of legitimacy and to avoid inquiries.”
A court filing uncovered by Picard and his team show payments were made by Madoff’s firm on behalf of 145 foreign account holders. These totaled about $330 million, but the IRS has erroneously refunded about $4.2 million to two of the foreign account holders.
Of course, this still leaves one hell of a shortfall when it comes to recovering all of the money lost in Madoff’s outrageous financial fraud. Picard said he has so far retrieved $8.7 billion – roughly half of the $17.3 billion worth of valid customer claims.
Madoff, meanwhile, continues to serve a 150-year prison sentence for his role in perpetrating a $65 billion Ponzi scheme. The former financier is serving time at FCI Butner Medium, while his wife Ruth Madoff has had to give up the couple’s $7 million New York duplex.