A man who made billions of dollars off Bernard Madoff's Ponzi scheme signed a will leaving the bulk of his fortune to charity, but the gift's ultimate size may depend on legal wrangling over how much of the money rightfully belongs to cheated victims.
Jeffry Picower, 67, a prominent philanthropist, drowned after suffering a heart attack in the swimming pool of his Palm Beach, Fla., mansion on Oct. 25.
Unlike some other Madoff investors, he died a rich man. The trustee unraveling Madoff's financial web said Picower withdrew some $7 billion from his Madoff accounts over the decades - well more than he invested.
That money is now known to have been stolen from other people, and Picower's widow said in a statement this week that the family wished to return some of it through "a fair and generous settlement" that might help overcome some of the "devastation" wrought on Madoff's victims.
The exact amount of that settlement is still unknown.
Madoff trustee Irving Picard has sued claiming victims are entitled to get back all $7 billion. The family has argued that under New York law, it should only have to return bogus profits they earned in the past six years, or around $2.4 billion. On Tuesday, the family's lawyer, William D. Zabel, said the Picowers might be open to paying "more than the law would require them to, in order to help the victims of scheme."
Yet the family also made clear that it is trying to protect its own charitable projects. In a will signed on Oct. 15, Picower said he wished to donate most his multibillion-dollar estate to a new philanthropic foundation, minus $200 million for his widow, Barbara, $25 million for his daughter, Gabrielle, and additional millions for grandchildren and other friends and relatives.
The foundation, the will said, would be "for broad charitable purposes," although Picower suggested it spend half its money on medical research.
He also gave $25 million to the Picower Institute of Learning and Memory at the Massachusetts Institute of Technology, $1 million each to the New York Public Library, the Harlem Children's Zone and the Nurse-Family Partnership in Denver, Colo. and $4 million to a group of Parkinson's disease research scientists. Picower had Parkinson's disease.
Lawyers for Picard have argued in court papers that Picower must have realized that the "implausibly high" returns he was getting from Madoff's operation were the result of fraud.
Barbara Picower said in her statement that it was "a great tragedy that my husband Jeffry's sudden and untimely death prevented him from seeing the full restoration of his reputation for honesty, integrity and professional achievement."
Zabel said he couldn't discuss how much the family might ultimately be willing to pay in a settlement because the two sides have been in negotiations. Zabel added that the Madoff case has been "an albatross" for the family, and weighed on Picower personally before his death.
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Madoff associate Picower wills bulk of fortune to charity