By Ben Fractenberg
MANHATTAN — A $7.2 billion settlement reached with a Bernie Madoff associate that will provide some relief to victims of Madoff's Ponzi scheme was announced Friday by prosecutors.
Irving Picard, a trustee working to recover money for Madoff investors, reached the settlement with the estate of Jeffry Picower, who ran a foundation managed by Madoff and was suspected of being privy to the fraud.
"Today's settlement marks a major milestone," said U.S. Attorney Preet Bharara at an afternoon press conference.
"It's the largest forfeiture in the history of the country through the Department of Justice," he went on to say.
Picower, who died of a heart attack in 2009, reportedly was working towards a settlement before he died, his family said, according to the New York Post.
Victims can expect to get the first distribution of the returned money sometime in the first fiscal quarter of 2011, said Picard.
"Every penny of this $7.2 billion settlement will be distributed to the BLMIS [Bernie L. Madoff Investment Securities] customers with valid claims," said Picard.
Picower's wife, Barbara, agreed to the settlement, though she still maintains her late husband did not know about the scheme.
"I am absolutely confident that my husband Jeffry was in no way complicit in Madoff's fraud and want to underscore the fact that neither the Trustee nor the U.S. Attorney has charged him with any illegal conduct," she said in a statement.
Bharara would not comment on whether they had any evidence showing Picower was in on the scam.
Madoff is currently serving a 150-year prison sentence for defrauding investors of about $65 billion.
Madoff's son, Mark Madoff, recently committed suicide. The younger Madoff was not implicated by authorities in the scam, but was named in several civil lawsuits.