Florida politician targets Madoff payout delay
Administrators racked up $38.8M in billings without distributing funds to victims
NEW YORK— The U.S. Justice Department’s delay in distributing $4 billion in forfeited cash to Bernard Madoff’s victims has caught the attention of at least one member of Congress, a Florida Republican whose state was hit hard by the biggest Ponzi scheme in the nation’s history.
Representative Vern Buchanan, whose district includes retiree-friendly Sarasota, said he’d consider joining with Florida’s entire congressional delegation to put pressure on the Justice Department if money doesn’t start reaching victims by the end of this year.
“We’re going to hold their feet to the fire,” Buchanan said in an interview Wednesday. “It’s a lot of money tied up and our goal is to do whatever we can to get it flowing.”
Buchanan wrote to U.S. Attorney General Jeff Sessions on May 31 following a Bloomberg report that the administrator of the Madoff Victim Fund, Richard Breeden, had racked up $38.8 million (U.S.) in billings through the end of 2016 without paying anything to victims. The fund was set up in 2012. Breeden blamed the delay on a flood of claims from across the globe and difficulty verifying them. He previously said payouts would start by the end of 2016.
“It’s been way too long,” Buchanan said. “Victims haven’t gotten a dime.”
Justice Department spokesperson Dawn Dearden declined to comment on Buchanan’s remarks.
The delay stems from the complexity in verifying documents provided by possible victims, according to a Sept. 18 letter to Buchanan from Assistant Attorney General Stephen Boyd, a copy of which was provided to Bloomberg. The fund will start making payments by the end of 2017, Boyd wrote.
Florida was second to New York in the number of people who were ripped off by Madoff. Buchanan took office in 2007, a year before Madoff’s arrest wiped out $17.5 billion in principal from his clients.
The investors haven’t been at a complete loss. A separate fund overseen in bankruptcy court by the trustee of Madoff’s firm, Irving Picard, has distributed more than $9 billion to victims since 2009.
Breeden said in a June update on his website that the Justice Department had approved more than 35,000 petitions claiming total losses of more than $6.5 billion. The agency says its fund will eventually help thousands of people who may have been locked out of the trustee’s recovery process because they didn’t invest directly with Madoff.
Breeden denied about 24,000 petitions earlier this year, according to his website. The initial wave of claims he received totalled $78 billion in losses, he said.