NEW YORK (Reuters) - A U.S. judge approved a $7.2 billion settlement on Thursday to pay former customers of the Madoff firm, the largest yet in the worldwide search for money lost in Bernard Madoff’s multibillion-dollar Ponzi scheme.

Bernard Madoff walks back to his apartment in New York, December 17, 2008. REUTERS/Shannon Stapleton

The settlement with the estate of longtime Madoff friend and investor Jeffry Picower could be appealed after U.S. Bankruptcy Court Judge Burton Lifland in New York dismissed objections to the deal, which was announced on December 17.

“I can almost never satisfy their positions,” Lifland said of the objectors. “I’m concerned about the broader grouping of people that are impacted by everything going on here.”

Thousands of small and large investors were financially ruined by Madoff’s decades-long scheme. A Ponzi scheme is one in which no actual trades in securities take place and early investors are paid with the money of new clients.

Investors who objected to the Picower deal are challenging the trustee in an appeals court over his method of calculating the “net winners” of the fraud. The “net winners” are clients who took out more than they deposited over the years from Bernard L. Madoff Investment Securities LLC (BLMIS).

Madoff, 72, is serving a 150-year prison sentence after pleading guilty in March 2009 to orchestrating the scheme. When he was arrested in December 2008, U.S. prosecutors estimated that the scheme took in about $65 billion over at least two decades.

Picard has put the amount of principal that investors lost in the fraud at about $20 billion. With the Picower settlement, Picard and his team of lawyers have secured about $10 billion.

Philanthropist Picower died of a heart attack in Florida at the age of 67 in October 2009. His wife, Barbara, agreed to the settlement for his estate.

In court on Thursday, David Sheehan, a lawyer for the trustee, commended Barbara Picower and said it was a “unique” and “great day” for BLMIS customers.

“The goal of this trustee is not just to get the 20 billion back,” Sheehan told the judge. “We then have the net winners and net losers ... they have 45 billion in claims together ... it is the goal of this trustee to recover all of that.”

The objectors to the Picower settlement argued in court that their claims against Picower were personal to them. They include claims for taxes paid on fictitious income and claims for the money stolen from them.

Their lawyer, Helen Chaitman, said an injunction in the settlement that would prevent her clients from individually suing the Picower estate left them no choice but to appeal.

“The devastation that has been caused is truly heinous and Mr Picower is being asked not to accept liability,” Chaitman argued.

The money recovered in the settlement is to be distributed to investors under the auspices of the U.S. Department of Justice and the Securities Investor Protection Corporation, an agency established by Congress to help investors of failed brokerages.

The cases are Securities Investor Protection Corp v. Bernard L. Madoff Investment Securities LLC, U.S. Bankruptcy Court for the Southern District of New York No. 08-1789 and Picard v. Jeffry M. Picower No. 09-01197.