Bernard Madoff Assets Total $1 Billion; Decision Near on Bail RevocationJan 9, 2009 | Parker Waichman LLP
Liquidators and investigators said today that the value of Bernard Madoff's assets total around $1 billion, just a fraction of what his investors may have lost in his alleged Ponzi scheme. Meanwhile, Madoff, his attorneys and prosecutors are awaiting a judge's decision on the revocation of his $10 million bail that could come sometime today.
Madoff has been under house arrest since his December 11 arrest for securities fraud. The 70-year-old Madoff - once a chairman of the Nasdaq stock exchange - is the founder and primary owner of Bernard L. Madoff Investment Securities LLC. The firm is primarily known for its business in market-making, or serving as the middleman between buyers and sellers of shares. However, Madoff also oversaw an investment-advisory business that managed money for high-net-worth individuals, hedge funds and other institutions.
According to the FBI complaint against Madoff, that business was largely a Ponzi scheme. The FBI said Madoff “deceived investors by operating a securities business in which he traded and lost investor money, and then paid certain investors purported returns on investment with the principal received from other, different investors, which resulted in losses of approximately billions of dollars.” Madoff reportedly told employees that his fraud could cost investors as much as $50 billion.
Shortly after Madoff’s arrest, a federal judge ordered that his business be liquidated under the jurisdiction of a bankruptcy court and assigned a trustee to oversee that process. A bankruptcy expert told Bloomberg News that based on the asset figure released today, defrauded investors should not expect much from that process. He said investors' recoveries from the liquidation of Madoff's assets will probably be in the range of 10 percent to 50 percent.
Meanwhile, a decision is expected soon - perhaps today - on the question of Madoff's bail. Earlier this week, U.S. Prosecutor Marc Litt asked U.S. Magistrate Judge Ronald Ellis in Manhattan to revoke Madoff’s $10 million bail after it was discovered that he or his wife mailed several packages of valuables to family and friends. Litt said that this constituted a transfer of assets in violation of a court order.
According to a Newsday report, prosecutors filed more court papers yesterday charging that Madoff had intended to give $200 million to $300 million in investor assets that remained to select family, friends and employees. That amount included $173 million in checks he had personally signed, Newsday said.
In a bid to keep him out of jail, Madoff's attorneys have suggested he be placed on additional restrictions, including putting jewelry in escrow, having guards search outgoing mail, and appointing a “personal receiver” over his assets and property. Bloomberg also reported that Madoff's attorneys also said his wife Ruth would agree to a freeze of her assets and bank accounts, formalizing a voluntary agreement reached Dec. 26 with the U.S. Attorney’s Office in Manhattan.