Madoff assets pursuit continues
NEW YORK, USA — WHEN he was first told in 2008 about Bernard Madoff’s epic pyramid scheme, attorney David Sheehan had a response that now sounds inconceivable.
“Who,” he wondered, “is Bernie Madoff?” Four years after Madoff’s arrest, Sheehan has the equivalent of a doctorate on the disgraced financier.
Irving Picard, the trustee appointed to recover funds for Madoff victims, and a battalion of lawyers headed by Sheehan have spent long days untangling Madoff’s fraud. On the fourth anniversary of Madoff’s December 11, 2008, arrest, it’s an international effort that shows no signs of slowing.
So far, they have secured nearly US$9.3 billion of the estimated US$17.5 billion that thousands of investors put into Madoff’s sham investment business. In a recent interview, Sheehan said his team at the Manhattan law firm of BakerHostetler is hopeful it can recover US$3 billion more over the next 18 months, cutting investors’ losses to around US$5 billion. Of the money collected so far, about US$3 billion has been approved for redistribution to victims through an ongoing claims process.
It’s an outcome that neither Sheehan nor Picard thought possible at the outset.
“I don’t think either of us thought we could achieve these results,” Sheehan said. “There’s never been any case like this.”
Sheehan described the task first faced four years ago as daunting: It required cracking the code on a secret Ponzi scheme that spanned decades and victimised thousands of customers on a scale never seen before. Madoff, 74, pleaded guilty and is serving a 150-year sentence.
“We had to reconstruct this from ground zero and put it back together again,” Sheehan said.
After examining the books at Bernard L Madoff Investment Securities LLC, lawyers quickly realised that statements showing investors held more than US$60 billion in securities were fiction.
Madoff made no investments. Instead, principal was simply being paid out bit by bit to other investors.
Having to hammer home that reality — over and over — to disbelieving investors was one of the first major hurdles, Sheehan said. Win or lose, Madoff clients were only entitled to what they put in.
—AP