Madoff victims to begin getting restitution

Financier Bernard Madoff arrives at Manhattan federal court March 12, 2009, in New York City.

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NEW YORK - Some of the investors bilked by Wall Street swindler Bernard Madoff will soon be receiving some money back, nearly three years after his scheme was first revealed.

The trustee charged with recovering funds for customers of the jailed financier says some $312 million will be distributed staring Wednesday on claims relating to 1,230 accounts.

Trustee Irving Picard has recovered about $8.7 billion from investors who were paid fictitious profits by Madoff above the amount they invested.

That's about half the roughly $17.3 billion lost by Madoff customers who have filed claims.

The bulk of the recovered funds can't be paid out yet because they are tied up in litigation and appeals.

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Madoff pleaded guilty to fraud charges and is serving a 150-year prison sentence in federal custody in North Carolina.

Meanwhile, nearly three years into the Madoff probe, Madoff's brother, son and niece have avoided criminal charges, raising the possibility that they could get off entirely.

People with knowledge of the case say federal investigators turned over potential criminal evidence against Peter, Andrew and Shana Madoff to prosecutors in the spring with expectations that a decision on whether to prosecute them would be made by the end of summer.

The U.S. attorney's office in Manhattan hasn't taken any action, suggesting any potential criminal evidence gleaned from a massive paper trail and the testimony of cooperators isn't strong enough to conclusively prove that the three knew that Madoff spent decades orchestrating the largest Ponzi scheme in history, said the people, who spoke on condition of anonymity because a final decision hasn't been announced. All three family members have denied any wrongdoing.

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Prosecutors already had decided not to charge Madoff's wife; Ruth. His son Mark, another former executive who was under scrutiny, committed suicide last year.