While Bernie Madoff sits in prison, the victims of his elaborate ponzi scheme are waiting to see if money will be returned to them. Today, they got a tiny bit closer to realizing that dream.

Optimal Investment Securities, a Geneva-based hedge fund, agreed to pay $235 million to settle claims by a group of bilked investors. The $235 million is worth 85% of the value of the Madoff victim's claims. The hedge fund, associated with Banco Santander, Spain's biggest bank, will pay a trustee that represents the victims to resolve the claims.

"I am very pleased that we reached such a favorable settlement with Optimal and that Optimal will pay more than $235 million to resolve the claims against it," Irving H. Picard, a bankruptcy lawyer and trustee for the investors, said in a release. "We hope that other entities against which we have claims will likewise come forward to settle those claims for the benefit of all of Madoff's victims."

The arrangement awaits bankruptcy court approval. If it goes through, the Madoff victims' trustee will have recovered a little more than $1.2 billion for the investors.

According to published reports, Optimal was one of many feeder funds for Madoff located around the globe. As intermediaries, the funds enticed and funneled client money into Madoff's ponzi scheme. Santander had as much as $3 billion with the disgraced scion via the fund. Santander itself was one of the biggest losers of the fraud.

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