In 2008, the world learned about Bernard Madoff’s unprecedented fraud, which spanned decades and defrauded thousands of investors of approximately $20 billion.
In December 2008, Bernard Madoff admitted that the investment advisory business within his firm was a Ponzi scheme, setting off his arrest and a chain reaction of events throughout the financial services world and philanthropic communities. A Trustee under the Securities Investor Protection Act was appointed to liquidate Madoff’s firm and to recover the proceeds from his Ponzi scheme.
FTI Consulting was retained by SIPC Trustee Irving Picard in December of 2008 to help track down the ill-gotten funds. Over the last 10 years, nearly 400 FTI Consulting professionals from around the world have worked with the Trustee to investigate and recover assets from more than 45 jurisdictions worldwide. FTI Consulting reconstructed books and records, determined amounts deposited and withdrawn from thousands of customer accounts, and analyzed hundreds of millions of transactions.
Since 2011, FTI Consulting’s role has been that of litigation support for more than 1,000 lawsuits – including two actions which reached the Supreme Court of the United States – as both expert witnesses and assisting counsel with discovery, trial services and management of evidence. FTI Consulting also supported the Trustee by identifying additional indications of fraud relevant to recovery initiatives being pursued.
To date, more than $13.3 billion, representing over 75 percent of the stolen funds, has been recovered through the Madoff Recovery Initiative. The recoveries far exceed similar efforts related to prior Ponzi schemes both in terms of dollar value and percentage of stolen funds recovered.
“At the start of this recovery initiative nearly 10 years ago, conventional wisdom said we would only be able to recover pennies on the dollar. However, our teams spread out across the globe, and with unrelenting determination and the support of the Securities Investor Protection Corporation, have recovered a sum that once seemed out of reach and, most importantly, restored stolen funds to their rightful owners.”
— Irvin Picard, Trustee, Securities Investor Protection Corporation
Senior Managing Director, New York
Q: How did FTI Consulting’s platform support an engagement of this nature?
A: “FTI Consulting’s platform was uniquely structured to work on and produce the extraordinary results achieved to date, with USD$14 billion recovered for victims. Indeed, few if any other firms had the capability to deploy the coordinated resources we were able to bring quickly to the matter. Forensic accounting, data analytics, economic analysis, expert witnesses, technology/e-discovery platforms and legal/investigative skills were all presented as one team overseen by layered management teams — senior managing directors and managing directors working with global staff. To date, FTI Consulting has received accolades from multiple law firms, courts and government agencies for the quality, timeliness and responsiveness of our professionals. The Trustee and SIPC have attributed much of the recovery successes to our professionals’ and experts’ work and diligence; coordination, communication and oversight were key elements to achieve the group goals. This case will continue for several more years and reflects our ability to maintain key professionals working on this decades-long matter, year 12 is about to start.”
Director, New York
Q: How did working on an engagement of this nature help you grow as a professional?
A: “Within my first five years on this case and at FTI Consulting, I rose from Consultant to Senior Consultant to Director. While I have had the opportunity to work on several other cases during the last five years, there is no question that the Madoff case has been integral to my career development. Working on this case has allowed me to immensely develop my forensic accounting, leadership and business development skills. I am very grateful, not only to have been able to work on this engagement, but particularly to have been able to work with the professionals at FTI Consulting who are part of the team. The professionals I work with have continued to push me toward my best and have enabled me to take on the leadership and responsibility on the case that I have been entrusted with thus far.”
Senior Director, New York
Q: This was one of the highest-profile cases in U.S. history. What challenges did that present?
A: “Due to the investigative work done by FTI Consulting in the beginning of this engagement, we became the source of facts for many facets of this matter. FTI Consulting maintained a tremendous amount of data and case knowledge that could be called upon at any point in time. FTI Consulting, and particularly the Data & Analytics team, had to organize and maintain millions of records of data in such a way so that we could be nimble in responding to our client’s needs and have the resources necessary to advise our client on some of the case’s most complex issues — including reconstructing 30+ years of books and records and unwinding one of the largest frauds in history. Even to this day, this engagement presents new challenges.”