Irving Picard, the trustee working to recover funds for victims of Bernard Madoff, is asking a judge to block a settlement reached with the founders of Fairfield Greenwich Group. Picard says the investors funneled billions of dollars to Madoff.

Picard said in court documents that if the settlement proceeds, it will “thwart the Trustee’s efforts to recover funds for equitable distribution to the victims of the Ponzi scheme.” The settlement with Fairfield, reached last month, represents a “substantial portion” of what the Fairfield defendants might recover, court documents said.

“We’re confident the trustee’s attempts to block the settlement is meritless and will not succeed,” David A. Barrett, a partner at Boies, Schiller & Flexner, told the Wall Street Journal.

In December 2008, Madoff was arrested for securities fraud after he masterminded one of the largest and longest-running Ponzi schemes in U.S. history. In the end, he cheated his clients out of between $18 billion and $20 billion, according to Picard. Madoff pleaded guilty to the charges in 2009 and is currently serving a 150-year sentence.

A hearing for final approval of this settlement is set for March 2013, and a hearing on Picard’s motion to block it has been set for Dec. 13.

Read more InsideCounsel stories about the Madoff scandal:

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