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Press Release

More Than $23 Million In Assets Recovered From The Estates Of Bernard Madoff’s Sons And From His Daughter-In-Law

For Immediate Release
U.S. Attorney's Office, Southern District of New York
Recovered Assets Will Be Used to Compensate Victims of the Madoff Fraud

Joon H. Kim, the Acting United States Attorney for the Southern District of New York,  Irving Picard, the Securities Investor Protection Act (“SIPA”) Trustee, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), today announced the recovery of more than $23 million in assets from the Estates of Andrew and Mark Madoff, and from Mark Madoff’s widow, Stephanie Mack, representing funds transferred to them by Bernard Madoff.  A Stipulation and Order of Settlement effecting the recovery was signed yesterday by U.S. District Judge P. Kevin Castel.  The assets will be liquidated and distributed to victims either through the Madoff Victim Fund, which was established by the Department of Justice, or through the BLMIS Customer Fund, which is administered and the SIPA Trustee.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “To date, this Office has recovered more than $9 billion in funds for victims of Bernard Madoff’s fraud. Today’s agreement, one of the final pieces in the Government’s eight-year effort to provide justice for Madoff’s victims, demonstrates our commitment not only to holding wrongdoers accountable, but also compensating victims of criminal fraud.”

SIPA Trustee Irving Picard said:  “Today’s announcement is the culmination of years of ongoing investigations by our legal teams and our negotiations with the Madoff family. The outcome marks another significant milestone in the eight years of the Madoff Recovery Initiative, during which we have recovered or reached agreements to recover more than $11.5 billion and distributed more than $9 billion to Madoff’s victims.”

FBI Assistant Director William F. Sweeney Jr. said:  “The investment scheme of Madoff’s was so devastating to so many investors who trusted his firm with their money. Today’s announcement of more than $23 million recovered is another small step we can take to try to make things right for the victims of Madoff’s massive Ponzi scheme.”

According to the Stipulation and Order of Settlement (the “Stipulation”) and other documents filed in connection with the criminal and civil forfeiture cases relating to the Madoff fraud:

For decades, Bernard L. Madoff (“MADOFF”) used his position as Chairman of Bernard L. Madoff Investment Securities (“BLMIS”), the investment advisory business he founded in 1960, to steal billions from his clients.  On March 12, 2009, MADOFF pled guilty to 11 federal felonies, admitting that he had turned his wealth management business into the world’s largest Ponzi scheme, benefitting himself, his family, and select members of his inner circle. 

MADOFF’s sons, Andrew and Mark Madoff (“ANDREW” and “MARK”), worked for MADOFF at BLMIS, amassing substantial assets from their employment there.  To fuel their luxurious lifestyle, MADOFF frequently provided money to members of his family, including millions of dollars to ANDREW and MARK.  As part of these transfers, ANDREW and MARK issued a series of seven promissory notes, with face value of $28.15 million in total (the “Notes”), to MADOFF, promising to repay the money provided by MADOFF, with interest, after the period of years specified in each Note.  Included in this amount is one Note for $6.5 million that was co-signed by MARK’s wife, Stephanie Mack (“MACK”).   

Following MADOFF’s arrest, his property was seized.  On June 29, 2009, United States District Judge Denny Chin sentenced MADOFF to 150 years in prison for running the largest fraudulent scheme in history.  Describing MADOFF’s crimes as “extraordinarily evil,” Judge Chin ordered MADOFF to forfeit $170,799,000,000 as part of MADOFF’s sentence.  In a final order of forfeiture dated February 16, 2016, Judge Chin ordered the Notes forfeited to the United States.

MARK passed away in 2010, and ANDREW passed away in 2014.  The Stipulation resolves the Government’s claims against the Estates of ANDREW and MARK (the “ESTATES”) and MACK based on the Notes, as well as various claims asserted against them by the SIPA Trustee.  Pursuant to the terms of the Stipulation, the agreement must also be approved by U.S. Bankruptcy Judge Stuart M. Bernstein, who oversees the SIPA Trustee’s efforts in bankruptcy court. 

The Stipulation requires the ESTATES and MACK to relinquish cash, securities, and liquid assets worth a total of more than $23 million, as well as various interests in additional corporate assets held by the ESTATES.  These additional corporate assets will be liquidated and the proceeds added to the total recovery.  The total recovery will be split evenly between the Government and the SIPA Trustee, and then distributed to victims of the Madoff fraud. 

The Government’s portion will be distributed to victims through the Madoff Victim Fund.  The Madoff Victim Fund is funded through recoveries by the U.S. Attorney’s Office in various criminal and civil forfeiture actions, and is overseen by Richard Breeden, the former Chairman of the United States Securities and Exchange Commission, in his capacity as Special Master appointed by the Department of Justice to assist in connection with the victim remission proceedings. 

Mr. Kim praised the work of the Federal Bureau of Investigation and the SIPA Trustee.    

The case is being handled by the Office’s Tax and Bankruptcy Unit and Money Laundering and Asset Forfeiture Unit.  Assistant United States Attorneys Jonathan Cohen, Louis A. Pellegrino, and Niketh Velamoor are in charge of the case.

Updated June 27, 2017

Financial Fraud
Press Release Number: 17-192