Picower to pay $7.2 bn over Madoff

The estate of Jeffry Picower, an investor with imprisoned con man Bernard Madoff, agreed to pay $7.2 billion to recover money he made from the fraud.

Picower’s estate will pay $5 billion to Irving Picard, the trustee overseeing the liquidation of Madoff’s firm, and $2.2 billion to US authorities, according to two people familiar with the matter who declined to be identified because the settlement isn’t public. Picard has recovered $2.5 billion for other investors to date.

The $7.2 billion represents the entire amount that Picard sought in a May 2009 lawsuit claiming Picower should have known Madoff ran a Ponzi scheme. Picard has filed hundreds of suits against banks, feeder funds, investors and others alleged to have profited from Madoff’s decades-long fraud.

Picower, a billionaire, had a heart attack and drowned in his swimming pool in Palm Beach, Florida, in October 2009. He was 67. Picard claimed Picower, his charitable foundation and related entities withdrew $7.2 billion from Madoff’s firm over 20 years, including $2.4 billion in the six years before Madoff’s arrest.

William Zabel, an attorney for Picower’s widow Barbara, said in August that the settlement range was between $2.4 billion and $7.2 billion. Zabel didn’t return calls seeking comment. Picard and Ellen Davis, a spokeswoman for US Attorney Preet Bharara in New York, declined to comment.

This month, Picard sued Bank Medici and its founder, Sonja Kohn, as well as Bank Austria, UniCredit and dozens of other parties. He is seeking $19.6 billion from them, which could triple to $58.8 billion under the Racketeer Influenced and Corrupt Organizations Act.