Madoff bonanza

The widow of late philanthropist Jeffry Picower, who made billions in phony profits investing with Ponzi king Bernie Madoff, agreed to return a staggering $7.2 billion to federal prosecutors in the largest recovery to date for victims of the massive fraud.

The huge windfall brings the total amount recovered since Madoff confessed to his crimes just two years ago to $9.8 billion — nearly half the estimated $20 billion investors lost in the scheme.

Federal officials hailed the landmark settlement as the largest fraud forfeiture in US history and sent spirits soaring by announcing plans to distribute money to Madoff victims as early as the first half of next year.

“Today’s truly historic settlement with the estate of Jeffry Picower is a game-changer for Madoff’s victims,” said Manhattan US Attorney Preet Bharara in announcing the settlement with Irving Picard, the court-appointed trustee charged with cleaning up Madoff’s multibillion-dollar mess.

Under the terms of the settlement, Picard’s office will collect $5 billion and Bharara’s office $2.2 billion. Eventually, all the money will go to Madoff’s victims.

Picower was found dead in 2009 at the bottom of his Palm Beach pool, where he drowned after suffering a massive heart attack. He spent his last days fighting Picard’s allegations that he “knew or should have known” about Madoff’s fiendish scheme.

Picard sued him for more than $7 billion, citing red flags such as the “implausibly high rates of return” benefiting Picower’s various accounts, including a 950 percent return in 1999.

The feds said yesterday that Picower invested just $619.4 million with Madoff starting in the 1970s but withdrew a whopping $7.8 billion over the years.

“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 US attorney has charged him with any illegal conduct,” Barbara Picower said yesterday.

When questioned yesterday as to whether Picower was complicit in the scheme, Bharara deemed the matter irrelevant in the wake of Picower’s death.

Barbara Picower’s attorney, William Zabel, said the settlement won’t damage his client’s charitable pursuits, which will include an unspecified amount to start a new charitable foundation.

Picower also earmarked some $30 million to be doled out to various pet charities in his will, including $25 million to the MIT Picower Institute for Learning and Memory and $1 million each to the New York Public Library and Harlem Children’s Zone.

The settlement also won’t affect monies Picower willed to family members, including $200 million to his wife Barbara and $25 million to his daughter Gabrielle, Zabel said.

“Whatever is left, which I can’t tell you is not insubstantial, will form the new foundation,” said Zabel, who added that Picower was a good investor in his own right, earning billions trading stocks like Apple.

–With reporting by Kirstan Conley

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