“We have recovered over $400 million for the investors and charities that were harmed by history’s largest Ponzi scheme,” New York Attorney General Eric Schneiderman said in a statement Sunday.
The clients of Merkin will receive $405 million, and New York state will get $5 million to cover the cost of the settlement worked out by Schneiderman.
The settlement will allow some of Merkin’s clients to recover as much as 40 percent of what they lost, with investors who had been kept in the dark recovering the most, the New York Post
High-profile victims include New York Law School, Bard College, Harlem Children's Zone, Homes for the Homeless and the Metropolitan Council on Jewish Poverty.
Schneiderman called the agreement "a victory for justice and accountability."
"Many New Yorkers entrusted their investments to Mr. Merkin, who then steered the money to Madoff while receiving millions of dollars in management and incentive fees," Schneiderman said. "By holding Mr. Merkin accountable, this settlement will help bring justice for the people and institutions that lost millions of dollars."
The state claimed in its complaint that Merkin, who served for many years as the president of the Fifth Avenue Synagogue, betrayed hundreds of investors, that entrusted him with their savings which in turn Merkin entrusted to Madoff.
In the end, Merkin collected $470 million in fees, according to the suit, which accused him of self-dealing, recklessness and negligence. He denies those charges.
As the Associated Press
reminds us, Madoff confessed in December 2008 that he was running a multi-decade Ponzi scheme and that more than $65 billion he claimed to have on hand for investors had dwindled to a few hundred million dollars from an original investment of about $20 billion.
The New York Times
says, Madoff couldn't have pulled off his fraud without help.
So he surrounded himself with a cast that included an ill-trained and inexperienced clerical staff he directed to “generate false and fraudulent documents.” He told lies and supplied false records to regulators, and shuffled hundreds of millions of dollars from bank to bank to create the illusion of active trading "on behalf of the investors, when, in fact, he was not,” The Times writes.
He pleaded guilty to fraud and is serving a 150-year prison sentence in Butner, N.C.