The Associated Press reported victims of Bernard Madoff's investment scheme will receive $405 million, according to the state attorney general.
Clients of hedge fund manager J. Ezra Merkin will receive the money over three years and New York state will get $5 million to cover the cost of the settlement worked out by Attorney General Eric Schneiderman.
The New York Times said Merkin's funds lost about $1.2 billion under Madoff and is accused of "deceiving his clients by collecting hundreds of millions of dollars in management fees when, in fact, he was simply handing money over to Mr. Madoff, not managing it himself."
"Many New Yorkers entrusted their investments to Mr. Merkin, who then steered the money to Madoff while receiving millions of dollars in management and incentive fees," Schneiderman said. "By holding Mr. Merkin accountable, this settlement will help bring justice for the people and institutions that lost millions of dollars."
Madoff confessed in December 2008 that he was running a multi-decade Ponzi scheme, he is serving a 150-year prison sentence in Butner, N.C. for fraud.
More from GlobalPost: Mets owners agree to pay $162 million to settle Bernie Madoff case
The news follows a recent settlement by New York Mets' owners Fred Wilpon and Saul Katz who were accused of ignoring warnings that Madoff was running a Ponzi scheme.
Wilpon and Katz agreed to pay $162 million to the victims' fund run by Irving Picard, the court-appointed trustee for Madoff’s firm, the New York Times reported.
The Wall Street Journal reported Picard had originally sued the Mets and their partners for $300 million.