The estate of the dead billionaire Jeffrey Picower has agreed to give up billions he took from his friend Bernie Madoff's accounts over the years, officials announced Friday.
In all, federal prosecutors allege Picower improperly took out more than $7 billion dollars in profits during the years Madoff ran his massive Ponzi scheme, money which will be returned to Madoff's victims.
"This settlement represents the largest forfeiture recovery in U.S. history," said Southern District Attorney General Preet Bharara at a press conference Friday. "More importantly, this settlement provides a significant measure of hope for the many victims of Bernard Madoff's horrific crimes, crimes which Judge Denny Chin described as 'extraordinarily evil.'"
Officials said the full $7 billion dollars will be paid back according to the settlement agreed to by Picower's widow Barbara. Bharara said Friday that $5 billion will be distributed to victims while the other $2.2 billion will be given to the U.S. Dept. of Justice Asset Forfeiture Program, who will also distribute the money to Madoff victims.
"I commend Barbara Picower for agreeing to turn over this truly staggerin sum, which really was always other people's money," Bharara said.
Picower at times saw returns of more than 100 percent annually on his so-called Madoff investments over 20 years. Representatives for Picower have long denied he had knowledge of the scheme. But investigators said he knew, or should have known, the astronomical returns on his money were simply not possible.
Barbara Picower said that the agreement expresses her and her late husband's intent to return "every penny received" from nearly 35 years of investing with Madoff to his victims, and that while her understanding was that the estate's legal liability didn't exceed $2.4 billion, the settlement was appropriate.
"I believe that the Madoff Ponzi scheme was deplorable, and I am deeply saddened by the tragic impact it continues to have on the lives of its victims. It is my hope that this settlement will ease that suffering," Barbara Picower said in a statement.
"I am absolutely confident that my husband Jeffry was in no way complicit in Madoff’s fraud and want to underscore the fact that neither the Trustee nor the U.S. Attorney has charged him with any illegal conduct," she added.
Picower was found dead in his Palm Beach swimming pool in October 2009 from an apparent heart attack. Picower gave millions to charity over the years. A call and email to Picower attorney William Zabel were not immediately returned.
Picard filed a flurry of lawsuits this month targeting banks, feeder funds and individuals seeking billions. Some of the lawsuits he filed under seal to keep from public view. The funds he hopes to recover would go to repay the initial money put in by Madoff investors, some who have lost their life savings.
The settlement announcement comes just days after Madoff's oldst son Mark killed himself in his Soho apartment. Mark Madoff used a dog leash to take his own life. He had been despondent amid ongoing questions about what did Madoff relatives know and when did they know it when it came to the $65 billion dollar Ponzi scheme. Madoff's sons have denied wrongdoing but the Trustee is suing to recover tens of millions they took out of the company.
So far the U.S. Attorney's office has indicted eight individuals and convicted three for playing a role in Madoff's Ponzi scheme, Bharara said. There are five cases currently pending and Madoff himself "will spend the rest of his natural life behind bars."
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