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State Board Report

October 2012

The Trustee in the Bernard L. Madoff case has been going through 16,000 claims from those who are seeking repayment from litigation to recover Madoff ‘s assets. After denying 66 percent of the claims, because the customers were not direct account holders of the Madoff firm as they had invested through other vehicles, the General Accounting Office found that more than three quarters of the investors were individuals and about 60 percent of them were “net winners,” having withdrawn more from their accounts than they had contributed. Some 50 percent of the institutional investors were net winners, according to the GAO’s calculations.

As the Madoff fraud affects customers’ taxable income, the IRS issued guidance on September 5, 2012 to help limit taxpayer errors resulting in over-or-under payment of taxes based on the tax impact of the Madoff fraud. See GAO-12-991 for the GAO report.

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