Wife of Madoff investor gives back profits of 7.2 billion dollars

Dec 17, 2010, 18:33 GMT

New York- US government officials have recovered a major chunk of the losses sustained by victims of disgraced financier Bernard Madoff, reaching a 7.2-billion-dollar settlement Friday with one of Madoff's top beneficiaries.

Barbara Picower agreed to hand back 7.2 billion dollars earned by her late husband, Jeffry, through investments made with Madoff over two decades. A civil lawsuit has alleged Picower, who passed away last year, may have known about the fraud, but the case was dropped as a result of Friday's deal.

The settlement brings to nearly 10 billion dollars the money recovered from investors that made a profit with Madoff. Victims hope to reclaim more than 20 billion dollars in principal investments lost as a result of the biggest financial fraud in US history.

Madoff is serving a 150-year jail sentence for running a pyramid 'Ponzi' scheme, in which he paid impossibly high returns to clients using money taken from new investors. On paper, the investments had grown to 65 billion dollars by the time Madoff was arrested in 2008.

Irving Picard, a court-appointed trustee in the Madoff case, said 'every penny' of the settlement money would go to the victims of Madoff's fraud.

'The importance of this settlement cannot be overstated,' Picard said in a statement, 'as it shows significant progress in our efforts to assemble the largest customer fund possible.'

Read more about Finance

Read more about US Justice