NEW YORK - The trustee recovering money for thousands of Bernard Madoff's victims reached a half-billion-dollar settlement with two financial funds that invested with the Ponzi schemer, lifting the total amount raised for cheated investors to over $10 billion.
Trustee Irving Picard announced the latest settlement Monday with so-called feeder funds -- Herald Fund SPC and Primeo Fund, both undergoing liquidation in the Cayman Islands.
Picard said $497 million will be added to the money already raised on behalf of investors, increasing to $10.3 billion the total amount recouped since Madoff's fraud was revealed in December 2008.
Stephen Harbeck, president of the Securities Investor Protection Corp., said those who have worked on recovering money for investors harmed by the multi-decade fraud were pleased with one of the largest recoveries yet.
"The prospect of amassing $10 billion in recoveries for Madoff victims was not viewed by many as a serious possibility at the start of the case," he said. "As remaining legal disputes continue to be resolved, we look forward to sharing news of additional distributions to Madoff customers."
Geoffrey North, a lawyer for Picard, said in a release that the deal resulted from "complex negotiations conducted across international borders" and would avoid the cost and delay of contentious litigation.
Madoff, 76, is serving a 150-year prison sentence after pleading guilty to fraud charges in March 2009.
The one-time Nasdaq chairman lied to investors when he told them in financial statements in November 2008 that their nearly $20 billion in investments had grown in value to over $60 billion. Madoff, actually, was nearly broke after failing to invest their money in the markets.
Most of the money had been distributed to other investors, leading Picard to spend much of the last six years trying to retrieve money that never should have been paid out.
The majority of the nearly half-billion dollars announced on Monday comes from Herald Fund and covers withdrawals the fund had made in the six years prior to Madoff's arrest, but the fund and its investors also are victims of the fraud and are eligible to recover up to $1.6 billion that can be redistributed to investors, authorities said.
So far, Picard has distributed nearly $6 billion to investors.
U.S. Bankruptcy Court in Manhattan has scheduled a Dec. 17 hearing to consider approval of the deal. Lawyers for the funds did not immediately return messages for comment.