Madoff Prosecutors Want Manhattan Digs, Other Assets Ruth Wants to KeepMar 16, 2009 | Parker Waichman LLP
With Ponzi schemer Bernard Madoff now in jail, federal prosecutors appear to be setting their sites on his wife, Ruth. According to USA Today, prosecutors want to seize the couple's $7 million Manhattan penthouse apartment, as well as another $62 million that Ruth Madoff had sought to keep.
Bernard Madoff pleaded guilty to 11 counts of securities fraud last week. The criminal charges Madoff admitted to included securities fraud, wire fraud, mail fraud, money laundering and making a false filing with the U.S. Securities and Exchange Commission.
He now faces up to 150 years in prison. In addition to a long jail term, U.S. prosecutors are also seeking as much as $170 billion in forfeited assets from Madoff. According to the Los Angeles Times, that amount includes all of the money that moved through the Madoff accounts since the early 1980s, when the government says the investor fraud began.
During last week's hearing, Madoff spoke publicly about the fraud for the first time. Madoff said he started the scheme during a recession, which was difficult for investing in stocks, the Journal said. “As the years went by, I realized my risk, and this day would inevitably come,” he said, reading from a statement. “I cannot adequately express how sorry I am for my crimes.”
Judge Denny Chin revoked Madoff bail after accepting his guilty plea, saying that Madoff had means to flee and an incentive to do so because of his age. Applause broke out in the Manhattan courtroom after the judge’s announcement. Until today, Madoff had been living in his luxurious Manhattan penthouse apartment under house arrest, an arrangement that did not sit well with defrauded investors.
That apartment is among the assets purportedly belonging to Ruth Madoff that prosecutors are seeking. Earlier this month, Madoff’s lawyers claimed the penthouse, $45 million in municipal bonds and another $17 million held in a Wachovia account belonged to Ruth Madoff, and had no connection to the fraud. Advocates for Madoff’s investors have decried this move, pointing out that Ruth Madoff was her husband’s bookkeeper for a time, and thus may be both civilly and criminally culpable for his fraud.
According to the New York Times, Ruth Madoff has not been charged with a crime, but some of her actions before and after her husband's arrest have raised eyebrows. For instance, she withdrew more than $15 million from an account at Cohmad Securities - an investment introduction business part-owned by Bernard Madoff which recruited investors for Madoff’s main fund - just days before her husband's arrest. She also mailed $1 million in jewelry to relatives after his fraud became public, the Times said.
In addition to the apartment, prosecutors want the $45 million in bonds and the $17 million in the Wachovia account that Ruth has sought to keep. According to the Associated Press, they are also seeking several homes the couple owned in Palm Beach, Long Island and France.
Prosecutors also want to confiscate a Cayman Islands company called Yacht Bull, and three boats valued at more than $10 million. Four cars, $65,000 in silverware, and a Steinway piano worth $39,000 are also included on the list of assets being eyed by the feds, the Associated Press said.
A report on Fox News said prosecutors were "working around the clock" to freeze Ruth Madoff's assets because of fears she might flee the country, or otherwise try to hide the assets.