After Bernard Madoff was exposed as the biggest Ponzi schemer in U.S. history, Irving Picard was named to liquidate the con man�s bankrupt firm and recover some of the $65 billion Madoff told customers was in their accounts. Two years later, Picard is about halfway to recovering the $20 billion customers invested before Madoff added phony profits.
As Picard pursues hundreds of lawsuits seeking $100 billion from banks and others he claims profited from the fraud, he may even be able to give some victims something Madoff never managed to deliver — a legitimate return on their investment, Bloomberg Businessweek reports in its Feb. 14 issue.
His strategy is simple. �We�re looking to collect as much money as possible,� Picard said outside court Jan. 13, after a bankruptcy judge approved a $7.2 billion settlement Picard and U.S. prosecutors reached with the estate of Jeffry Picower, a Madoff investor who died in 2009.
The Picower settlement — the biggest of its kind — underscores the tricky position Picard is in: To return money to Madoff�s victims, he has to first take it from somebody else. Picard�s choices about whom to pay and whom to sue have led some victims to feel wronged again.
�He�s doing what the receiver is supposed to be doing,� says John V. Donnelly III, a partner with the law firm Cozen & O�Connor in Philadelphia, who represented an investor in recovering assets frozen in R. Allen Stanford�s alleged $7 billion fraud.
Picard has made several decisions that paid off, including seeking additional funds from investors he claimed should have known they were profiting from a fraud, says Sandra Mayerson, a bankruptcy lawyer with the firm Squire Sanders in New York.
�He�s consistently taken the most aggressive position possible,� she says, �and that�s been very successful in recovering money for the estate.�
Just days after Madoff told authorities his financial empire was �one big lie� in December 2008, the Securities Investor Protection Corp. named Picard, 69, trustee of Bernard L. Madoff Investment Securities, making him responsible for unwinding the fraud. Madoff, 72, is serving a 150-year sentence in federal prison in North Carolina.
When Picard was named Madoff trustee, the SIPC said he had liquidated more brokerage firms as trustee than anyone. A week later he announced he was leaving his law firm, Newark, New Jersey-based Gibbons PC, for the New York office of Baker Hostetler LLP, a 650-lawyer firm based in Cleveland.
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