Many of Bernard Madoff's victims get back all of their investment

Some of the victims of convicted Ponzi swindler Some of the victims of convicted Ponzi swindler Bernard Madoff have recouped their original investments as of March 2013. Madoff pleaded guilty to the multibillion-dollar swindle four years ago. Photo Credit: Getty Images, 2009

advertisement | advertise on newsday

When the staggering Bernard Madoff Ponzi scheme was revealed in December 2008, some pundits didn't think investors stood a chance at recovering more than two cents on the dollar for their investments.

But on Friday, the bankruptcy trustee in Wall Street's largest scam sent out another round of payments that effectively gives back to more than 1,100 investors with allowed claims all of their original investment. With this third round of payments, trustee Irving Picard and the Securities Investor Protection Corp., a nonprofit entity, will have distributed $5.4 billion to Madoff's victims. That amount includes $807 million in SIPC advances to investors.

"This distribution is another important milestone in the global Madoff recovery initiative," Picard said in a prepared statement Monday announcing the payout. "Significant recoveries remain on hold, however, pending appeals and court rulings."

Some 1,076 investors with approved claims haven't recouped everything they invested with Madoff, who investigators said lost more than $17 billion in customer investments in his scheme. Picard has recovered more than $9.3 billion in victim assets, but because of legal challenges, has not paid it all back to investors. Federal prosecutors plan to distribute $2 billion from a different pool of cash.

Still, Picard has been able to give back about 43 percent of the total losses. That is also good news for the owners of the New York Mets, who settled a lawsuit Picard brought against them a couple of years ago that allowed the team owners to file a claim for losses of about $178 million. Under the terms of the settlement, Fred Wilpon, Saul Katz and other team owners don't actually get that money back, but first have it credited to pay back about $162 million in profits they agreed to repay Picard. Under the bookkeeping arrangement of the settlement, the Katz-Wilpon investors have been credited with paying back more than $70 million of the $162 million debt, according to court records and the trustee's website. Dave Sheehan, counsel to Picard, said that while it was too early to tell if more money would be paid back to investors in 2013, he believed the trustee was making headway on legal fronts internationally.

"We are confident in our legal positions and we look forward to more good news this year for [Madoff] customers," Sheehan said in a statement.

You also may be interested in: