Victims of Bernie Madoff's Ponzi scheme will get another $500 million as part of a legal settlement announced on Monday, pushing the total amount they'll recoup to over $10 billion.
The latest deal involves two Cayman Island feeder funds that withdrew money prior to the failure of Madoff's investment firm, according to court-appointed trustee Irving Picard.
Their money would bring the total amount recovered to 60 cents on the dollar for victims of the fraud. In all, investors lost an estimated $17.5 billion in the scam.
"By any measure, the settlement terms are highly advantageous, not only to (Madoff's) direct customers, but also potentially to the indirect investors in the Herald Fund," Oren Warshavsky, Picard's lead attorney, said in a statement.
In 2009, Bernie Madoff was sentenced to 150 years in federal prison for the scam that led to paper loses of $65 billion and cash losses of just over $17 billion.
So far, $5.25 billion has been paid out with the rest is either in litigation or held in reserve. Those with losses of up to $925,000 have been fully compensated.
As part of the latest settlement, court-appointed trustee Irving Picard agreed to release $1.6 billion to the Cayman Island funds, Herald Fund SPC and Primeo Fund. Both had placed most of their investors' money with Madoff. But like many "indirect" investors with a net gain in the investment, the funds had been ineligible for payouts. By settling, those funds will finally get access and be eligible for a share of any future payouts from other sources.
Picard filed the settlement at the U.S. Bankruptcy Court in Manhattan. A judge must approve the agreement.
The news comes two months after Madoff's son Andrew passed away due to lymphoma in September, leaving his children, fiancee and estranged wife over $15 million in property.
Andrew and his brother Mark, who committed suicide in 2010, alerted authorities about their father's Ponzi scheme in December 2008.