Payout to Madoff's fraud victims begins

The trustee liquidating Bernard Madoff's firm said he'll start distributing money Wednesday, starting with $312 million to go to victims of the fraud who have approved claims.

The trustee, Irving Picard, said Tuesday in a statement that he'll begin paying the money to the holders of 1,230 Madoff accounts, reimbursing 4.6 percent of the money they lost in Madoff's Ponzi scheme.

"This initial distribution is the first return of stolen funds to Madoff's defrauded customers," Picard said in the statement. "Significant, additional funds -- currently unavailable for distribution due primarily to appeals -- will ultimately be returned to their rightful owners, as well as future monies yet to be recovered. The need among many Madoff customers is urgent, and we are working to expedite these distributions."

Picard has filed more than 1,000 suits against banks, feeder funds, former Madoff investors and others he claims profited from the fraud. Picard said he has recovered about $8.7 billion, or about half the $17.3 billion in principal he claims was lost.

The bulk of the recovered funds can't be paid out yet because they are tied up in litigation and appeals.

Madoff pleaded guilty to fraud charges and is serving a 150-year prison sentence in federal custody in North Carolina.