Madoff Ponzi Scheme: Following the Money to Recovery

In 2008, the world learned about Bernard Madoff’s unprecedented fraud, which spanned decades and defrauded thousands of investors of approximately $20 billion.

Situation

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.

Our Role

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 FTI Consulting reconstructed books and records, determined amounts deposited and withdrawn from thousands of customer accounts, and analyzed hundreds of millions of transactions.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.

Impact

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.

Client Testimonial

“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