Bankruptcy Judge OKs Santander Madoff Settlement

Jun 16 2009 | 12:39pm ET

A federal judge today approved Banco Santander’s settlement with the court-appointed liquidator of Bernard Madoff’s empire of fraud.

U.S. Bankruptcy Court Judge Burton Lifland, who is overseeing the dismantling of Bernard L. Madoff Investment Securities, approved the $235 million deal, struck last month. Lifland said the settlement with Santander’s Optimal Investment Services fund of hedge funds business would add to the growing pool of money for distribution of victims of Madoff’s $65 billion Ponzi scheme, bringing the amount to more than $1.2 billion.

Two Bahamas-domiciled Optimal funds will return 85% of the total amount they withdrew from Bernard L. Madoff Investment Securities in the 90 days before his arrest in December. In exchange, the funds would be protected against further claims by the trustee, Irving Picard, and will receive $500,000 for their own claims against Madoff.

Madoff pleaded guilty to fraud, money laundering, false filings and perjury in March and will be sentenced at the end of the money. He faces up to 150 years in prison.

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