NEW YORK - (Mealey's) In what is being called the "largest single forfeiture in U.S. history," the U.S. attorney for the Southern District of New York and others announced Dec. 17 that they have reached a $7.2 billion settlement with the estate of deceased investor Jeffrey M. Picower to recover profits he received as part of his investment in Bernard L. Madoff Investment Securities LLC (BLMIS) (United States of America v. $7,206,157,717 on deposit at JP Morgan Chase Bank, N.A. in the accounts set forth on Schedule A, No. 10-9398, S.D. N.Y.).
U.S. Attorney for the Southern District of New York Preet Bharara, Chairman of the Securities Investor Protection Corp. Orlan Johnson, BLMIS liquidation trustee Irving H. Picard, Assistant Director-in-Charge of the New York Field Division of the FBI Janice K. Fedarcyk and Special Agent-in-Charge of the New York Field Office of the IRS Charles R. Pine made the announcement at a press conference in New YorK.
Under the terms of a stipulation and order of settlement, which was filed in conjunction with a complaint in the U.S. District Court for the Southern District of New York Dec. 17 by Bharara, Picower's estate will forfeit $7,206,157,717 that is currently held in an account with JP Morgan Chase Bank, N.A. Picower's estate will not admit guilt, and the estate will be released from all claims related to Picower's investment in BLMIS.
Furthermore, under the terms of the stipulation and order, $5 billion of the government forfeiture will be released to Picard, as trustee of BLMIS, for distribution to BLMIS investors.
Picower, who officials say had invested in convicted Ponzi scheme mastermind Bernard L. Madoff's investment company in the 1970s, died in October 2009. In his will, officials say, Picower "sought to establish a charitable foundation, which was to receive the overwhelming majority of his fortune, and continue his lifelong dedication to philanthropy and to funding medical research."
According to the press release issued in conjunction with the press conference, Picower's widow, Barbara Picower, agreed "to give up the entire net total of any and all funds that Picower or any related entity received from BLMIS."
[Editor's Note: Full coverage will be in the December issue of the LexisNexis Financial Services Litigation Report. In the meantime, the stipulation and order of settlement is available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844. Document #88-101221-066B. For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]
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