Noting that victims of fraudster Bernie Madoff had not been paid from a group that is supposed to distribute $4 billion to them, U.S. Rep. Vern Buchanan, R-Fla., called on the U.S. Department of Justice to step in and expedite the process.
On Wednesday, Buchanan pointed to reports that RCB Fund Services LLC had not sent out funds to Madoff’s victims since being authorized to do so five years ago. During that time, RCB Fund Services has collected almost $39 million for its services. RCB Funds is connected to Richard Breeden, who is administering the Madoff Victim Fund (MVF).
“These victims, many of whom are from Sarasota and Southwest Florida, are being victimized twice,” Buchanan said. “They were cheated out of their life savings and now they’re being denied timely compensation from a fund that was specifically set up to help them.”
Buchanan sent a letter to U.S. Attorney General Jeff Sessions on Wednesday, urging DOJ to step in.
Madoff was accused of bilking almost $65 billion from almost 5,000 investors. After being arrested in 2008, Madoff pled guilty to running a Ponzi scheme and is currently serving 150 years in federal prison. The MVF was created from $2.4 billion recovered from Madoff and now stands at around $4 billion after an agreement was reached with JPMorgan Chase & Co.
Buchanan noted one in five of Madoff’s victims came from Florida. Only New York had more Madoff victims than the Sunshine State.
“Despite the government’s recovery of billions of dollars from Bernie Madoff, victims of his Ponzi scheme have yet to receive a single dollar, while tens of millions of dollars have been spent on administrative costs. I urge you to correct this injustice immediately,” Buchanan wrote Sessions. “It has been more than eight years since Mr. Madoff’s arrest. His massive, multi-decade fraud ruined the lives of thousands of investors, many of whom lost their lifetime and retirement savings. To date, the Justice Department has recovered more than $4 billion for Mr. Madoff’s victims, and established a fund to distribute this money in 2012.
“Not a single dollar has been paid to these victims,” Buchanan added. “Yet, the firm hired to oversee the fund has received more than $38 million in payments. It is outrageous that victims languish in hardship while government-sanctioned administrators collect millions in fees. For seniors, Mr. Madoff’s crimes were particularly damaging. Rather than enjoying the comfortable retirement for which they spent decades saving, these victims have been forced to struggle in their golden years. Residents in my home state and congressional district were greatly impacted by this colossal swindle. As reported by the Miami Herald, according to Madoff’s client list, nearly one in five of his customers hailed from Florida.
“These victims, many of whom are from Sarasota and Southwest Florida, are being victimized twice. They were cheated out of their life savings and now they’re being denied timely compensation from a fund that was specifically set up to help them. It is a disgrace that the process of reimbursement has yet to begin,” Buchanan continued. “It has been said that justice delayed is justice denied. That is particularly true for seniors that were victimized by Mr. Madoff. Given Florida’s large number of victims, I want to know why this process is taking so long, and what steps your department will take to ensure the firm moves immediately to distribute repayments.
“I urge you to do all you can to expedite payment to these victims. Money should be flowing to victims, not bureaucratic overhead,” Buchanan concluded.
Breeden posted an update at the MVF’s website at the start of the year.
“Since our last update, the Madoff Victim Fund has been busy finalizing thousands of claims and making recommendations to the Department of Justice,” Breeden noted. “We were unable to initiate our first payout in 2016 as we had hoped because of the volume and complexity of claims. However, critical work has been accomplished that should put MVF in a position to be able to make a large initial distribution to victims this year.”
