A look 10 years out

It has been 10 years, but Bernard Madoff’s investors vividly recall the shock of learning in December 2008 that they were victims of the biggest con man of all time.

“It was disbelief. It was distrust. I mean this man was highly recommended,” said Ilene Kent of Columbus, Georgia, who said her elderly parents lost three-quarters of their net worth in the $65 billion fraud.

“I trusted him because he’d been managing my daughters’ college funds since the 1970s,” said Joyce Greenberg, a stockbroker who is now retired and living in Houston. By 2008, her Madoff account balance had grown into millions of dollars.

“I absolutely thought it was gone with the wind,” Greenberg said.

For customers like Greenberg and the Kents, the shock quickly turned into action as they moved to sort out what had happened and what, if anything, they could recover. But that is where their stories diverge.

The outcomes for Madoff’s victims — as many as 37,000 people in 136 countries — vary widely. They are the result of a deeply controversial process for unwinding the fraud that is still playing out to this day, having set precedents — and cautionary tales — for scandals to come.

As a group, Madoff’s customers have fared remarkably well for a fraud of this magnitude — or any size for that matter. According to Irving H. Picard, the trustee appointed by a federal bankruptcy court to liquidate the Madoff firm and return assets to investors, more than $13.3 billion had been recovered as of Nov. 30. That amounts to 76 percent of the $17.5 billion in principal lost in the scam. More than $11 billion has already been returned to investors, with more distributions to come. Normally, victims of a Ponzi scheme are lucky if they can recover pennies on the dollar.

In addition, a second fund, established by the Department of Justice and comprising forfeitures from the various Madoff criminal cases, has paid out nearly $2 billion, primarily to customers who invested with Madoff indirectly through feeder funds. The fund has another $2 billion to pay out as it continues processing claims.

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