ALBANY, N.Y. - A settlement announced Sunday will bring $405 million to victims of Bernard Madoff's investment scam, the state attorney general said.
The clients of hedge fund manager J. Ezra Merkin will receive $405 million, and New York state will get $5 million to cover the cost of the settlement worked out by Attorney General Eric Schneiderman. The victims include Bard College, Harlem Children's Zone, Homes for the Homeless and the Metropolitan Council on Jewish Poverty.
Schneiderman called the agreement "a victory for justice and accountability."
"Many New Yorkers entrusted their investments to Mr. Merkin, who then steered the money to Madoff while receiving millions of dollars in management and incentive fees," Schneiderman said. "By holding Mr. Merkin accountable, this settlement will help bring justice for the people and institutions that lost millions of dollars."
Merkin's attorney, Andrew Levander, didn't respond to a request for comment Sunday.
Merkin had managed investments for hundreds of investors in four funds: Ariel Fund Ltd., Gabriel Capital L.P., Ascot Fund Ltd. and Ascot Partners L.P. Schneiderman said many of the investors are New York residents and charitable organizations. Many of them asked not to be identified.
Most investors will get more than 40 percent of their losses, but only up to $5 million. Those who lost more could see additional payments, depending on the number of investors who seek reimbursement. Investors will see the terms of the settlement in the next few days, the Attorney General's Office said.
Merkin used his social and charitable contacts and his reputation as a money manager over two decades to raise more than $4 billion from investors, many of them charitable groups. Schneiderman said Merkin concealed Madoff's role through misleading documents and quarterly reports.
Merkin invested more than $2 billion with Madoff, who used money from new investors to pay returns to previous clients. Madoff is serving a 150-year sentence in a federal prison in North Carolina.