Madoff Trustee Gets $76.5 Million From Austrian Feeder Fund
Madoff Trustee Recovers $76.5 Million From Alpha Prime Fund
(Bloomberg) -- An Austrian hedge fund that helped direct investments from abroad into Bernard Madoff’s Ponzi scheme agreed to pay $76.5 million to victims of the fraud in a settlement with the trustee who is unwinding the con man’s firm.
Trustee Irving Picard said Monday that he reached the deal with Alpha Prime Fund Ltd., which is domiciled in Bermuda and managed in Austria. The settlement brings the total recovered by Picard to $12.8 billion. More than $10 billion has been distributed to victims of Madoff’s fraud, while some money has been set aside pending resolution of lawsuits by victims seeking more cash than the trustee says they’re entitled to.
Alpha Prime Fund was one of several hedge funds that combined to feed almost $4 billion into Madoff’s scheme by way of Austrian banker Sonja Kohn and Bank Medici AG, according to a complaint filed by the trustee in December 2010 in Manhattan bankruptcy court. The settlement doesn’t affect the trustee’s claims against Kohn, a longtime associate of Madoff’s, and the founder of Bank Medici.
Picard has been liquidating Manhattan-based Bernard L. Madoff Investment Securities LLC since shortly after Madoff’s arrest in December 2008. The scam also wiped out tens of billions of dollars in fake profit that victims believed they held in their accounts.
"The fund is glad to have this portion of the litigation behind them and hopes to have the final phase of this action completed as quickly as possible," Todd Duffy, an attorney for Alpha Prime Fund, said in an email.
Madoff pleaded guilty in 2009 and was sentenced to 150 years in prison for orchestrating the decades-long Ponzi scheme. Five of his top aides were convicted after a trial in 2014.
Picard, an attorney with Baker & Hostetler LLP in Manhattan, was hired by the industry-financed Securities Investor Protection Corp. to recover cash for victims shortly after Madoff’s arrest.
A hearing on the settlement is scheduled for March 28.
To contact the reporters on this story: Christie Smythe in Brooklyn at csmythe1@bloomberg.net, Erik Larson in New York at elarson4@bloomberg.net.
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Paul Cox, David S. Joachim
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