In a statement, Deputy Attorney General Rod Rosenstein explained where this money is coming from: And indeed, the money that populates the Madoff Victim Fund isn’t taken from Madoff himself, but instead from various seized assets and settlements connected to the massive, tangled spiderweb of the Madoff case. And even the government’s pledged $4 billion is only approximately 20 percent of the total sum Madoff is believed to have stolen from investors – that figure comes to around $20 billion altogether. Both the Madoff Victim Fund and the Madoff Recovery Initiative, a private effort towards the same goal, have used money from civil settlements to pay back Madoff’s victims. For example, a sum of around $1.7 billion ended up in the Madoff Victim Fund following JPMorgan Chase’s agreement to pay that amount as a settlement against allegations it didn’t do enough to stop Madoff while he was a customer of the bank. Then there’s forfeiture of civil assets, like the $2.2 billion seized from the estate of the late Jeffry Picower, who reportedly benefited the most from Madoff’s crimes while he was alive. Seizing alleged criminal assets from individuals who haven’t been convicted of a crime is a controversial practice, but one that Rosenstein defended in a recent Wall Street Journal column: As for Bernie Madoff, he’s currently serving a 150-year prison sentence for his financial crimes.
