California money manager's estate returns $277M to bilked Madoff investors

By Amy R. Connolly

Bernie Madoff leaves federal court after a hearing where U.S. prosecutors persuaded a judge to end his house arrest for allegedly violating his bail conditions on January 14, 2009 in New York City. On Friday, the estate of money manager Stanley Chais, one of Madoff's friends and business associates, agreed to return some $277 million to bilked investors. Photo by Monika Graff/UPI

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The estate of Stanley Chais, a well-known money manager and business associate of Ponzi schemer Bernie Madoff, will return some $277 million to bilked investors in a deal announced Friday.

Chais, who was one of Madoff's earliest investors, denied knowing anything about the Ponzi scheme and insisted he had been duped as well, but multiple lawsuits were filed against him. He died in 2010. The estate announced it will pay some $262 million to Irving Picard, the court-appointed trustee liquidating Madoff's firm, and $15 million to California's attorney general to resolve a class-action lawsuit.

The agreement brings total recoveries of stolen funds to more than $11.5 billion, "or more than 65 percent of the principal estimated to have been lost by Madoff's defrauded customers with allowed claims and those claims that are deemed determined pending the outcome of litigation or future settlements," trustees said.

"This outstanding outcome is the result of four years of negotiation and mediation which addressed and resolved myriad complex legal issues and underscores the tenacity of the teams who continue to deliver additional recoveries for Madoff's victims," Tracy Cole, an attorney representing Picard, said.

Madoff, who pleaded guilty in 2009 to operating the $50 billion Ponzi scheme, is serving 150 years in prison.