Settlement: Madoff Merkin Clients To Get $400 Million Back
NEW YORK (CBSNewYork) -- There was a major victory for people who lost big money in the Bernie Madoff scandal.
As CBS 2's Dick Brennan reported Monday, they may be getting some if it back.
It will finally be payback for clients of Ezra Merkin, a high-powered money manager who invested in Madoff's multi-million dollar Ponzi scheme. A civil settlement announced by New York State Attorney General Eric Schneiderman will recover more than $400 million for investors.
"Merkin convinced them he was personally overseeing their money, and making their decisions when in fact none of it was true. He was merely taking their money and shipping it off to Madoff to manage," former Security and Exchange Commission prosecutor Robert Heim said.
Merkin had lived the high life, in a Park Avenue apartment that was said to be filled with a multi-million dollar art collection.
And when it came to money, he was thought to be an expert manager, known as an "investing guru" who seemingly could do no wrong," Brennan reported.
"His reputation was essentially a person make consistent returns, of 10 percent returns a year. He also was a very good salesman for people who were unsure on how to invest their funds," Heim said.
Some of his investors included charities and non-profits like the Harlem Children's Zone, New York Law School and the Metropolitan Council on Jewish Poverty.
Merkin is still facing a lawsuit brought by the Madoff trustee, who's demanding he turn over $500 million that Merkin had withdrawn from Madoff accounts, officials said.
Investors may receive 40 percent of their losses. In a statement, Merkin said he cares deeply about them, and is pleased with the settlement.
Under the agreement, Merkin will pay back the $400 million over a three-year period.
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