Ruth Madoff Uses Homestead Act to Protect Palm Beach MansionMar 19, 2009 | Parker Waichman LLP
In yet another move to retain their ill-gotten wealth and protect themselves from creditors, Bernard Madoff's wife, Ruth, has declared her $9.4 million Palm Beach, Florida mansion her primary residence, says Bloomberg News.
Ruth Madoff, wife of the criminal mastermind behind the massive and historic Ponzi scheme that decimated billions of dollars in investor savings, applied for a so-called homestead exemption for property taxes. According to an assistant property appraiser for Palm Beach County, Madoff received her exemption, a real estate maneuver that enables homeowners to avoid seizure of property once in place, explained Bloomberg.
On September 18, Ruth Madoff applied for the exemption, receiving it on January 12, Bloomberg reported, citing appraiser office information. With the exemption in hand, Ruth Madoff is entitled to a tax reduction this year based on a $50,000 property appraisal reduction, said Bloomberg. Last year, Ruth Madoff paid $157,298 in property taxes on that home, which was appraised at $9.4 million in 2008, up from $7.4 million in 2007, according to Palm Beach County records; the 8,753-square-foot property is located at 410 North Lake Way, said Bloomberg.
Meanwhile, this week the U.S. government announced plans to seize a variety of Madoff assets including the $7 million Manhattan apartment where Madoff was kept under house arrest and the Palm Beach home that Ruth Madoff—who has yet to be accused of any crime in relation to her husband’s activities—is working to protect, said Bloomberg. Florida residency can be proven via voter registration and a Florida driver’s license and involves making a sworn statement attesting that the home to be exempted is a primary residence, said Bloomberg.
WBPF pointed out that not only is the Palm Beach mansion vacant, but Ruth Madoff was turned down for exemption in 2007 because she was receiving tax consideration for homeowners in New York. Just prior to Madoff’s arrest, Ruth ended her New York exemption and applied for exemption in Florida, said WBPF.
Madoff himself pleaded guilty to 11 counts of securities fraud and 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 yesterday, 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.
Ruth Madoff bought the Palm Beach mansion in 1994 for $3.8 million, according to county records, said Bloomberg, deep within the time of her husband's Ponzi scamming activities. Bernard Madoff has been held at the Metropolitan Correctional Center in lower Manhattan since March 12.
Accountant Richard Rampell—who has clients who have lost about $100 million in the Madoff scheme—finds Ruth’s recent homestead filing suspicious, and a move meant to protect her investments from bilked clients looking to reclaim losses, said Bloomberg. Rampell told Bloomberg, "Just doesn't pass the smell test, that she could be completely innocent of it, and she's trying to claim $100 million in assets. Where did she get all this? They just didn't appear out of thin air," adding that, "Florida is a debtors haven. It's a refuge for deadbeats and crooks and scam artists and it has been forever.”