NEW YORK (Reuters) - The overseer of a $4 billion U.S. Department of Justice fund for victims of Bernard Madoff's Ponzi scheme said he expected to recommend payouts for at least 25,280 claimants with nearly $4 billion in fraud losses.
Richard Breeden, special master of the Madoff Victim Fund, said in an update on his website this week that his office was "substantially" finished with the initial claims review process, having analyzed 63,580 claims covering $67.8 billion of alleged losses.
While there is no timetable for payouts, the announcement suggests that many Madoff victims may soon see the end of their 7-1/2-year wait to recoup at least some losses.
Photos from Bernard Madoff's trial:
Bernie Madoff trial
More than 25,000 Madoff victims now eligible for $4 billion fund
Victims of Bernie Madoff's massive Ponzi scheme, Morton Chalek, 91, standing, a WWII vet, and his friend Fran Reiss, 79, a retired educator, pose in the apartment they share, on Thursday, Dec. 5, 2013 in New York. With the fifth anniversary of Madoff's fraud approaching, Chalek and Reiss are among a legion of former investors still struggling to move on after seeing their life savings go up in flames. (AP Photo/Bebeto Matthews)
Jack and Melba Cutter are shown in their home in a subdivision outside the north-central Colorado city of Longmont on Saturday, June 27, 2009. Jack Cutter, who is 80 years old, has returned to work as a clerk at a meat counter in a supermarket after he and his wife invested their savings with a small firm last year that sent the money into feeder funds created by Bernie Madoff. (AP Photo/David Zalubowski)
David Friehling, the former accountant for con artist Bernard 'Bernie' Madoff, center, exits federal court following a sentencing hearing in New York, U.S., on Thursday, May 28, 2015. Friehling, who signed off on phony audits of Madoffs firm for decades, became the fourth person tied to the $17.5 billion fraud to avoid prison after aiding prosecutors. Photographer: Sam Hodgson/Bloomberg via Getty Images
NEW YORK, NY - OCTOBER 08: Daniel Bonventre (L), former director of operations for investments, working under Bernie Madoff, arrives at Federal Court, to begin a trial being brought against him by the federal government on October 8, 2013 in New York City. Federal prosecutors allege that Bonventre worked for Madoff and knowingly supported the largest Ponzi in history, which Madoff led. Prior to the collapse of the scheme, Madoff reported that his accounts held approximately $68 billion, when they in fact only held a few hundred million dollars. Madoff was found guilty and is serving a 150-year sentence in North Carolina. (Photo by Andrew Burton/Getty Images)
NEW YORK, NY - DECEMBER 20: Brother of convicted Ponzi king Bernard Madoff ,67-year-old Peter Madoff, arrives at U.S. District Court in Manhattan on December 20, 2012 in New York City. A plea agreement makes a 10-year prison term all but certain for Madoff who was convicted after he pleaded guilty to conspiracy and falsifying books and records of an investment adviser. (Photo by Spencer Platt/Getty Images)
Daily News back page February 16. 2011, Headline: The Knew Nothing - Fred Wilon and Mets partner Saul Katz didn't know about Bernie Madoff's multi-billion dollar sam, says the man who ran it all. Madoff comes to Mets owners defense. Lupica: with nothing to gain why would Bernie lie now? (Photo By: NY Daily News via Getty Images)
Annette Bongiorno, a former secretary at Bernard L. Madoff Investment Securities LLC, exits federal court in New York, U.S., on Friday, Jan. 14, 2011. Bongiorno, 62, is among five people facing charges of helping Bernie Madoff defraud investors of billions of dollars in a Ponzi scheme. Photographer: Michael Nagle/Bloomberg via Getty Images
Daniel Bonventre, former director of operations for Bernard L. Madoff Investment Securities LLC, exits federal court in New York, U.S., on Friday, Jan. 14, 2011. Bonventre, 63, is among five people facing charges of helping Bernie Madoff defraud investors of billions of dollars in a Ponzi scheme. Photographer: Michael Nagle/Bloomberg via Getty Images
UNITED STATES - JUNE 29: Ira Sorkin, Bernie Madoff's lead attorney, arrives at manhattan federal court in New York, U.S., on Monday, June 29, 2009. (Photo by Jin Lee/Bloomberg via Getty Images)
UNITED STATES - MARCH 14: Daily News front page March 14, 2009, Headline: WHAT BERNIE MADE OFF WITH, Reviled Madoffs own more than 826M in planes, homes & assets, Bernie Madoff,Bernard Madoff. Rihanna's back in town, Rihanna (Photo by NY Daily News Archive via Getty Images)
NEW YORK - MARCH 12: Investors DeWitt Baker (R) and Judith Welling, who had invested with financier Bernard Madoff, are interviewed outside a Manhattan Federal courthouse after Madoff was sent by a judge to jail to await sentencing on March 12, 2009 in New York City. Madoff was ordered to jail after pleading guilty to a multibillion-dollar financial fraud scheme and could end up with a sentence of 150 years in prison. (Photo by Rick Gershon/Getty Images)
NEW YORK - MARCH 10: Accused $50 billion Ponzi scheme swindler Bernard Madoff exits federal court March 10, 2009 in New York City. Madoff was attending a hearing on his legal representation and is due back in court Thursday. (Photo by Mario Tama/Getty Images)
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Madoff's fraud was uncovered in December 2008. The swindler, now 78, pleaded guilty three months later, and is serving a 150-year prison term for running what federal prosecutors called a $64.8 billion Ponzi scheme.
"It sounds like it is good news for claimants," said Daniel Krasner, a partner at Wolf Haldenstein Adler Freeman & Herz in New York, whose clients have submitted dozens of claims to Breeden. "They could end up with a significant portion of their claims."
Payouts would be separate from those being made by Irving Picard, a court-appointed trustee liquidating Bernard L. Madoff Investment Securities LLC, to the swindler's former customers.
Breeden's fund also differs because he is allowing claims by "indirect" investors who had accounts at "feeder funds," hedge funds, banks and other entities that sent their money to Madoff.
In his update, Breeden said he expected to reject payouts on 7,540 claims covering $25.7 billion of alleged losses.
Breeden has also told holders of 30,760 "incomplete" claims covering $27 billion of alleged losses that they have until early July to fix deficiencies. Another 1,000 claims, some of which involve swaps and derivatives, have yet to be reviewed.
"Completing the initial review of claims is a major milestone in the case, and it brings us a big step closer to the cash distributions we all want to see," said Breeden, a former chairman of the U.S. Securities and Exchange Commission.
Breeden said he planned to file formal payout recommendations with the Justice Department by the end of August. He was not immediately available on Wednesday for comment.
Picard has paid out roughly $8.6 billion of the $11.1 billion he has recouped, according to his own website.