MVF Commences Distribution 10

December 2024 Update

Setting a New MVF Record for Total Payouts

In D10, MVF is paying $131,354,704, or an additional 2.71% compensation on fraud loss to 23,408 eligible victims. This raises the percentage received by victims from our prior level of 91% to 93.71%. In all cases, this recovery level is computed after considering a victim’s recoveries from all sources. MVF has now provided cumulative payments of $4,302,594,528 to 40,930 victims of the Madoff fraud.

MVF made its first distribution in November 2017. In that first distribution we brought 21,618 victims to a 25% recovery of their fraud losses (from all sources). Roughly 16,500 of those victims, or more than 75%, had ZERO prior recoveries on their losses. Over the ensuing seven years, MVF has made nine additional distributions, each of which went to at least 20,000 victims.

Who We Helped

The victims MVF has assisted are overwhelmingly individuals – over 38,860, or 95% of the petitioners MVF has paid during the process.  In total, these individuals had cash-in, cash-out losses of over $4.94 billion.  Other sources of compensation, including recoveries trickling down through the Madoff and feeder fund bankruptcies, delivered a 34.6% recovery to these people.  MVF then paid $2.8 billion to bring them all to a 93.71% recovery.

MVF approved petitions submitted by 2,069 “institutions”, including 633 corporations.  These entities had total cash-in, cash-out fraud losses of approximately $2.6 billion, or roughly 52% as much as the amount that individuals lost.  Of the institutions, 864 were charities or non-profit organizations serving an enormous variety of objectives.  Approximately 74% of these institutions were organized in the United States, with the remainder located in 23 other countries.

There was an amazing variety among the charitable and nonprofit institutions that Madoff stole from.  At least 108 universities, colleges, professional schools or secondary schools were among the victims.  Many were American schools, located in states across America.  Schools and universities in Great Britain, Australia, Israel, Switzerland, Italy, Belgium, Finland, Canada, Singapore, Argentina and Hong Kong also had funds stolen from them.  The amounts of loss for educational institutions ranged from a few thousand dollars to nearly $20 million.

In addition to schools, charitable foundations of many types were victimized.  These entities supported libraries, hospitals, health clinics, medical research, youth development and recreation, law enforcement, and dozens of other purposes.

Retirement plans of large and small businesses, labor unions, churches and governmental entities collectively lost over $750 million.  Victims included 162 “defined benefit plans”, 19 profit sharing plans, 112 multi-employer plans (often union plans), 36 government pension plans, 4 church retirement systems, and others.  Some pension funds lost tens of millions, while others lost tens of thousands.

Madoff’s crime did not have any boundaries, and it was aimed at virtually all types of investors.  Young and old, large or small, individuals, families, small businesses or corporations — Madoff stole from them all.

MVF’s work was overwhelmingly focused on individuals and their suffering.  Many public accounts seem to assume that most of the victims were large institutions and high net worth individuals.  As the initial petitions were filed with MVF, we realized that this assumption was quite incorrect.  Most of the victims MVF helped were actually small investors, with losses averaging roughly $250,000.

Out of the 23,408 victims being paid in D10, only 742, or 3.2%, suffered fraud losses over $1 million.  Indeed, only 1,594 of these victims, or 6.8%, had fraud losses larger than $500,000.  3,950 or roughly 17%, had losses between $100,000 and $500,000.  Of the people receiving D10 checks, 17,864 or more than 76% had fraud losses of less than $100,000.  The largest single group was comprised of 6,671 victims who lost between $10,000 and $50,000.  Out of the nearly 40,930 total victims MVF has paid over our ten distributions, 38,548 or more than 94% had fraud losses of less than $500,000.

MVF reviewed some enormous petitions with losses in the tens of millions, and in a few cases, over $50 million.  However, our work was overwhelmingly concerned with assisting individuals, families and small businesses.  Though many individual accounts involved smaller losses, often those losses represented an extremely large portion of the individual’s total savings or net worth.  For individuals who work paycheck to paycheck or live on a fixed income, the sudden loss of an account with $10,000, $25,000, $50,000 or $100,000 was often devastating.  We are very proud that MVF and the Department were able to develop a process that provided recoveries for helpless victims where no other recoveries were available, or where other recoveries were limited.

Resolving Issues of “Collateral Recoveries”

DOJ regulations require MVF to reduce remission payments by amounts a victim has already received from other sources, or that are “reasonably available” to the victim even if not received.  Thus, MVF did not pay for losses that victims had already recovered from somewhere else, or were likely to do so.  With finite resources, double payments for some former Madoff investors would correspondingly reduce payments to all others. By bringing each victim to an equal percentage recovered from all sources, MVF prevents some victims from being overpaid, and others underpaid.

One goal of MVF throughout our process has been to level out the drastically different recovery percentages among different victims. Starting with D1 in November 2017 and continuing to D10, MVF set a series of percentage recovery baselines, shown in the chart below.  In each distribution, MVF brought every investor up to that level of recovery but did not pay anyone who had already recovered more than that.  This “rising tide” structure enabled MVF to eliminate the enormous early differences among victims.

Reaching the End of the Road

Even today, 15 years after discovery of the fraud, nearly 10,000 victims eligible for a D10 check have received zero compensation from any source other than MVF. Altogether, more than 18,600 victims, or 75% of all victims eligible for D10 payments, have received less than 30% recoveries from other sources. These numbers highlight that MVF has been the lifeline for many victims, and we have reached far more people with far more dollars than originally anticipated.

After so many years of work, MVF has nearly finished distributing the forfeited funds. We have done everything we set out to do, and far more. We know that we made an immense positive difference in the lives of thousands upon thousands of innocent victims of crime. We assisted investors who lost many millions of dollars, and also those who lost hundreds of dollars and everything in between.

Delivering payments of this magnitude directly to tens of thousands of victims has been very satisfying for everyone involved in the MVF process. We hope an effort of the scale of MVF’s is not needed again due to a future crime. However, if another such horrific event were to happen, we hope that it will be handled with the same energy, creativity and relentless focus that the Department of Justice and MVF have brought to this case.

While the financial assistance of MVF comes to an end, we hope that the world will never forget what was done to so many innocent people. Preserving the memory of what Madoff did may be the best defense against allowing any such thing to happen ever again.

Respectfully,

Richard C. Breeden
Special Master, Madoff Victim Fund

Click here to view the Press Release from the U.S. Department of Justice announcing the tenth MVF distribution.

Click here to view the Press Release from The United States Attorney’s Office for the Southern District of New York.