Picower Estate to Pay $7.2B to Madoff Victims

Of all the investors tied to the epic fraud -- philanthropist Jeffry M. Picower may have been Bernie Madoff's single biggest beneficiary -- reaping some $7 billion in profit over the years, reports CBS News chief investigative correspondent Armen Keteyian.

Today, however, it was thousands of those Madoff victims who benefited, with federal prosecutors announcing a deal to recover all of that money -- $7.2 billion -- from Picower's estate and holdings. The verdict is the largest single civil settlement in U.S. history.

"The agreement resolves a complaint we filed this morning seeking to recover the profits the Picowers received over the course of 35 years from Bernard Madoff," said Preet Bharara, U.S. attorney, Southern District of New York.

In May 2009 Irving Picard, the trustee in charge of recovering money lost in scheme, sued the publicity-shy Picower and his wife, citing "outrageous" annual returns as high as 950 percent on Madoff investments at a time average returns on the market were only 9 percent.

"We are hopeful that positive and fair outcomes like the Picower negotiations and several of our other settlements can and will be repeated," said Picard.

Today Picard set his sights on others.

In October 2009 Picower was found dead of a heart attack in a swimming pool in his Palm Beach, Florida, mansion at the age 67.

Today his widow issued a statement saying, in part, "I believe the Madoff Ponzi scheme was deplorable...It is my hope that this settlement will ease that suffering."

The settlement more than triples the money available to repay victims to about $9 billion - about half of what was actually lost in the historic fraud.