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Madoff Case: Trustee Fees Continue to Add Up

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By Kamika Dunlap on December 21, 2009 9:55 AM

Court appointed trustee fees continue to add up as lawyers and consultants try to unravel Bernard Madoff's massive fraud.

The Associated Press reports a judge approved payment of $22.1 million in legal fees.

This follows initial payouts of over $15 million in July. The approved bills will be paid by the Securities Investors Protection Corporation, an industry-financed agency that oversees brokerage firm bankruptcies.

The legal tab adds up to about $40 million for the first 10 months of the Madoff liquidation.

Lawyers say they're following a complex paper trail while trying to process 16,239 claims and seeking to recover billions of dollars in loses.

As previously discussed, the U.S. Marshals Service is selling jewelry and other items to raise money for the victims of Madoff's Ponzi-scheme.

Madoff, 71, was sentenced in June to 150 years in prison -- the maximum penalty the judge could give him -- for orchestrating a massive scheme that spanned decades.

Also, David Friehling, the former accountant for Madoff pleaded guilty to fraud and other charges as previously discussed.

The judge approved payment of trustee fees to Irving Picard.

"Contrary to what have mistakenly been reported by the news media and on blogs, no administration costs, including compensation of the trustee and his counsel, will be paid out of any recovery obtained by the trustee," Picard said.

Several lawyers and consultants are handling  Madoff's personal bankruptcy and eight foreign law firms tracking assets overseas.

All the firms submitting fee applications to the court have agreed to a 10 percent discount from their usual rates, except for a firm in Gibraltar, which has discounted its rate by 20 percent.

In addition, 20 percent of the approved payments will be held back until the conclusion of the liquidation, unless the court decides otherwise.

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