Six years after Bernard Madoff’s fraud collapsed, the cost of liquidating his defunct investment advisory firm to repay thousands of victims has topped $1 billion, though the con man’s former customers aren’t footing the bill, according to a Bloomberg News analysis on Friday. The fees, paid by the industry-backed Securities Investor Protection Corp. (SIPC), which is managing the case, have financed a team of lawyers who this week surpassed $10 billion in recoveries for victims, or almost 60 percent of the principal that vanished after Madoff’s arrest in December 2008. Irving Picard, the bankruptcy lawyer who’s leading the effort as trustee for Madoff’s company, included the new fee total in an interim report posted yesterday on his website. A bankruptcy judge in Manhattan regularly approves the fees, sometimes over the objections of victims’ groups. The victims, who lost $17.5 billion in principal, have been paid back almost $6 billion by Picard since he started distributing the recovered funds. Billions more are being held in reserve until lawsuits by victims seeking larger payouts are resolved. The last distribution, about $349 million, was in May.
