The $330 million he has sent to customers, out of the $2.6 billion set aside for them, contrasts with about $800 million they've received from the insurance program of the Securities Investor Protection Corp., which hired Picard and pays him.

SIPC, which is funded by the major brokerage firms, no longer expects Picard to pay all currently allowed claims of $17.3 billion in full, "based on current trustee assets, lawsuits filed, and the estimated possibilities for recoveries arising from that litigation," the U.S. Government Accountability Office said in a March report.

Even if Picard gets all of the $9 billion he says he has raised, he would need another $8 billion or so to pay the claims, the GAO said. "SIPC does not now expect this level of recoveries to occur," the report said.

Picard Fees

As of March 31, Picard himself has been paid about $5.1 million in fees. His law firm, Baker & Hostetler LLP, has been paid about $262.2 million in fees. All professional fees and expenses now stand at about $522 million, with about $31.7 million having been spent on general administrative costs such as office rent and telephones. By 2014, the bill will top $1 billion, Picard has estimated.

Most of the money Picard says he has raised came from settlements, not court victories for his lawsuits, and he is fighting to preserve his exclusive right to sue parties that allegedly profited knowingly from the fraud.

Some customers say he is usurping their rights. After a district judge in March upheld Picard's $5 billion agreement with Jeffry Picower's estate--his biggest settlement by far--lawyer Helen Chaitman appealed on behalf of a client. Chaitman will "absolutely" take the case as far as the U.S. Supreme Court if necessary, she said in an e-mail. That process that could take more than a year.

Picower Withdrawals

Picard's 2009 suit claimed that Picower, one of the con man's largest individual investors, should have known Madoff ran a Ponzi scheme when he withdrew $7.2 billion from the brokerage. Sarachek said Madoff claim prices were around their peak in January 2011, when a judge approved the Picower forfeiture, with $5 billion going to the Madoff estate and $2.2 billion to the U.S.

Some customers regard the Picower settlement as unfair because it stops them from suing the Picower estate themselves.
Picard says he can't distribute the Picower money until there's a final court order that can't be appealed. He didn't have to lock himself into waiting for finality, as Picower's estate didn't make that a condition of forfeiting money, Chaitman said in a court filing.
The delay in paying customers "is totally of the trustee's own making," she said. Chaitman has also challenged most of his fee requests.