Angry victims of convicted Ponzi schemer Bernie Madoff are up in arms over as much as $250 million in legal fees they claim will be paid to Irving Picard, the court-appointed trustee overseeing the break-up of the fraudster’s fake investment firm.
The victims, who claim they are being treated unfairly by Picard and the Securities Investor Protection Corp. (SIPC), the body set up to provide insurance for victims of securities fraud, are set to air their grievances in New York Bankruptcy Court on Thursday.
Chief among their complaints are the massive legal fees Picard and his firm, Baker & Hostetler, are charging. So far, the firm has claimed more than $15 million, or around $1 million a week, in fees for 3½ months of work. Picard believes it could take as long as five years to settle all Madoff claims, which means his firm could reap at least $250 million from the bankruptcy.
If approved by the bankruptcy court, those fees will be paid out of SIPC’s coffers. The victims claim in court papers filed last night that the money being claimed by Picard is rightfully theirs.
Neither Picard, nor Stephen Harbeck, CEO of SIPC, returned calls.
“It is unconscionable that SIPC should be squandering potentially hundreds of millions of dollars when it doesn’t even have enough money to compensate all the victims who have filed a claim,” said Helen Davis Chaitman, a lawyer representing more than 100 Madoff victims in the case.