Bernard Madoff's victims have so far received $530 million in compensation - a record for a securities industry group providing the money, but only a fraction of what they lost in the disgraced financier's epic swindle.
The total being paid by the Securities Investors Protection Corp., also known as the SIPC, was announced Wednesday during a telephone briefing about the ongoing liquidation of the jailed money manager's assets and the processing of thousands of claims from burned investors.
Stephen Harbeck, president of the SIPC, said the $530 million exceeded the combined amount from 321 previous brokerage liquidations since 1970. SIPC is authorized by Congress to guarantee brokerage accounts for a maximum $500,000.
On the same call, court-appointed trustee Irving Picard said he had identified $21.2 billion losses in about 2,300 customer accounts. He also said he had approved $4.4 billion in claims, and located about $1.5 billion in assets that will help cover a portion of them.
"We have made significant headway in recent months ... under what have been very challenging circumstances," Picard said.
The Madoff Scam: Meet The Liquidator
Madoff, 71, pleaded guilty earlier this year to charges that his secretive investment advisory operation was a multibillion-dollar Ponzi scheme. The former Nasdaq chairman was sentenced to 150 years in prison.
The trustee has sued Madoff's family members and wealthy associates in bankruptcy court in Manhattan, claiming they made off with billions of dollars that should be returned to his clients. Among the defendants was Jeffry Picower, who after having a heart attack.
A complaint filed in May accused Picower - a Florida philanthropist and friend of Madoff for decades - of being the biggest beneficiary of the fraud. It said he made $7 million through "implausibly high purported returns" - an allegation he had denied.
Picower's death "is certainly tragic," the trustee said. "No one would have expected it. Having said that, we will continue with the litigation."
Earlier this month, a came out through court papers. Joseph Cotchett, a California-based lawyer representing about a dozen victims interviewed the former money manager in July at the Butner Federal Correctional Complex near Raleigh, N.C.
The lawyer found the mastermind of one of history's largest financial frauds now reduced to nighttime walks around a prison track for fun, according to a filing containing details of Madoff's new life.
When not rubbing elbows with drug and sex offenders, Madoff spends time with Carmine Persico, a reputed Colombo crime family boss, and Jonathan Pollard, an American convicted of selling military secrets to Israel more than two decades ago, according to the lawsuit.
The lawsuit filed by Cotchett also alleged Madoff ran an office rife with cocaine use and sexual escapades.
According to the allegations - their source isn't specified - Madoff deployed an employee and to get drugs from 1975 to 2003, fueling an office so cocaine-laden insiders dubbed it "the North Pole." Office parties featured topless waitresses, employee affairs were common and Madoff kept a list of his favorite pretty masseuses in his personal phone book, the lawsuit said, claiming investors' money helped pay for it all.