Trustee Attempts to Retrieve Funds from Madoff Investors

April 23, 2009 ( - The bankruptcy trustee in the case against Ponzi scheme mastermind Bernard L. Madoff has taken action aimed at recovering over $400 million withdrawn by investors prior to the scheme becoming public.

USA Today reports that an estimated 200-plus letters seeking return of the funds were issued by Irving Picard, the court trustee appointed to recover Madoff’s assets on behalf of the victimized investors, according to Ronnie Sue Ambrosino, coordinator of a Web site for Madoff victims.

Under New York state law, court trustees can seek recovery of withdrawals for up to six years, an effort known as a clawback procedure, the news report said. The theory behind the effort is that the withdrawals were paid from a financial scam, so should be returned and proportionately redistributed to all victimized investors.

Not surprisingly, the move by Picard has ignited angry investor opposition.

In March , Madoff pleaded guilty to eleven felony counts related to a $50-billion Ponzi scheme.   He faces a maximum sentence of 50 years in prison (see Madoff Scheduled for Sentencing, Faces 150 Years ).