Infamous fraudster Bernie Madoff died in federal prison on Wednesday at age 82. His massive Ponzi scheme defrauded investors of an estimated $17.5 billion, racking up huge losses for banks, pension funds and individuals who invested in his Bernard L. Madoff Investment Securities.
Not everyone simply lost money, however. A number of early investors and financial firms cashed out of Madoff’s funds over the years before the house of cards collapsed—allowing them to walk away with billions of dollars that Madoff claimed were their investment profits, but which were actually just newer investors’ deposits.
Since the bottom fell out of Madoff’s scheme in 2008, trustees have been scouring the globe to find and return money to the victims of the great swindle. So far Irving Picard, an attorney who is overseeing the liquidation of Madoff’s firm, has clawed back more than $14.4 billion in recoveries and settlement agreements.
“The pain experienced by the victims of Mr. Madoff’s fraud is not diminished by his death, nor is our work on behalf of his victims finished,” Picard said in a statement on Wednesday. “My legal team and I are committed to continuing to identify and recover Mr. Madoff’s stolen funds and return them to their rightful owners.”
Here are some of the Madoff investors who were forced to give the most money back to compensate victims of Bernie Madoff’s ponzi scheme:
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1. Jeffry Picower
Amount returned: $7.2 billion
The single biggest beneficiary of the Madoff scheme, Picower—an investor and philanthropist—netted $7.2 billion from withdrawals of funds from Bernard L. Madoff Investment Securities. He died in 2009, in what was ruled an accidental drowning, amid speculation that he knew the firm was a ponzi scheme. (Picower denied the claims, though Madoff later said he believed Picower must have known.) In 2010, Barbara Picower, Jeffry’s widow, agreed to hand the $7.2 billion over to the U.S. government—its largest forfeiture in history—to help repay Madoff victims. “Barbara Picower has done the right thing,” Preet Bharara, then U.S. Attorney for the Southern District of New York, said at the time.
2. Tremont Group
Amount returned: $1.025 billion
The Rye, New York-based company was one of Madoff’s largest “feeder” funds—which invested their clients’ money in Madoff’s firm. Picard sued Tremont in 2010 in an effort to claw back “fictitious profits, preferential payments and fraudulent transfers” received from Madoff’s firm, alleging that Tremont did not conduct adequate due diligence about Madoff’s operations. “Tremont blindly relied upon Madoff to drive the funds’ returns and, more importantly, Tremont’s profits,” Picard said at the time. (The company told Forbes in 2008 that it had “exercised appropriate due diliegence” but was victimized by a scheme “designed to deceive individuals and organizations, managers and analysts–including some of the largest, sophisticated financial institutions in the world.” In 2011, Tremont agreed to pay $1.025 billion to Madoff victims.
3. The Kingate funds
Amount returned: $860 million
Another set of “feeder” funds that steered client money into Madoff’s coffers, the Kingate Funds invested some $1.7 billion with Bernie Madoff over a 14-year period before his arrest. The funds went into liquidation in the British Virgin Islands after Madoff was revealed to be a fraud. In 2019, Kingate agreed to return $860 million to Madoff victims, about 93% of the $926.4 million the firm withdrew from their accounts at Madoff’s firm.
4. Thema International Fund
Amount returned: $687 million
The Irish “feeder” fund invested virtually all of its clients’ money in Madoff’s funds, starting in the 1990s. In 2017, Thema agreed to return $687 million to Madoff victims—which represented 100% of the money it had pulled out of Bernard L. Madoff Investment Securities in the six years before the fraud was revealed, plus about 20% of the money it had pulled out in the years before that.
5. Carl Shapiro & family
Amount returned: $675 million
One of Madoff’s oldest friends and earliest investors, Shapiro—a wealthy Boston investor and philanthropist who died in March 2021—pumped money into Madoff’s funds in his own name, as well as via family trusts, limited liability companies, partnerships and other corporate entities. His son-in-law, Robert Jaffe, worked for Cohmad Securities, essentially Madoff’s marketing operation. In 2010, Shapiro and his family agreed to pay a total of $675 million to the government, including $38 million repaid by Jaffe, to be returned to Madoff victims.