Madoff trustee spent $26.9 million to recover $849,000 in Q2, Q3

By Ernest Scheyder

NEW YORK (BestGrowthStock) – A trustee overseeing the bankruptcy of Bernard Madoff’s investment firm spent $26.9 million in the second and third quarters to recover $849,000 for Madoff’s victims, according to a federal court filing.

Irving Picard, the trustee, said in a filing with Manhattan federal court that much of the expense — $15.8 million — went to cover fees for his law firm, Baker & Hostetler LLP.

Picard said his “ability to call on the resources of Baker & Hostetler in such areas as corporate, real estate, bankruptcy, securities, employment, tax, banking and litigation has been of material assistance.”

Since beginning the task of weeding through the aftermath of Madoff’s Ponzi scheme, Picard has recovered about $1.5 billion for victims through September 30, the filing said.

About 14,030 claims had been reviewed as of October 22, with 2,280 approved for payment, the filing said.

Besides the law firm expense during the second and third quarters, Picard spent $7.1 million on consultants and $107,560 on “hosting expenses,” according to the filing.

Most of the $849,000 recovered for victims of Madoff’s Ponzi scheme came from investors who received preferential payouts ahead of the bankruptcy of Madoff’s firm, the filing said.

A portion of the amount recovered — $71,158 — came from interest and dividends on various bank accounts.

Bernard Madoff was arrested and charged in December 2008 when his sons, according to their lawyers, reported him to authorities after he confessed to running a massive $50 billion dollar Ponzi scheme.

A Ponzi scheme is one in which early investors are paid with money deposited by new clients.

Madoff, 72, pleaded guilty in March 2009 and is serving a 150-year prison sentence.

(Reporting by Ernest Scheyder; Editing by Jan Paschal)

Madoff trustee spent $26.9 million to recover $849,000 in Q2, Q3