Bernard Madoff's victims, some of them older investors who lost their life savings, can look forward to a payout sooner rather than later. But the amount won't be what some were hoping for.
The U.S. Supreme Court Monday declined to review how the trustee for Madoff's victims calculated their losses, a decision that could help speed a payout of nearly $2 billion, reports Bloomberg news.
"After more than two years, this is excellent news for the hundreds of victims who have not received a return of all the funds they deposited with Madoff," Stephen P. Harbeck, chief executive of the Securities Investor Protection Corporation, said in a joint announcement with Madoff trustee Irving Picard.
The high court effectively upheld a federal appeals court ruling, which said that amounts distributed to victims can't be based on fictitious and enormous paper profits in the account statements that Madoff sent out, but on how much money the victims actually put into their accounts. In other words, if a person invested $5 million with Madoff, the claimable loss could not exceed that amount even if the statement showed, say, a balance of $15 million.
People who emerged as "net winners" by taking out more money than they put in are being sued by the trustee to return funds that exceeded their deposits.
In an interview with the Palm Beach Post, 77-year-old Renee Blumenthal of Boynton Beach, Fla., said she and her husband, Gerald, lost their retirement nest egg investing in Madoff's scheme. She had to return to work as a teacher, ending her retirement. Other older people had similar heartbreaking stories about how their golden years were tarnished by Madoff's epic fraud.
Picard has distributed $330 million to customers in the nearly four years since Madoff's 2008 arrest. But he said he'd held back on distributing more money from a $2.3 billion fund for Madoff's investors, not knowing how much on the dollar he was to pay.
Picard said after the Supreme Court decision that he'll ask a judge to quickly approve new distributions.
Madoff is serving a 150-year prison sentence.
photo credit via flickr.com