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Ruth's $45 Million Stash
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Bernie's wife isn't in the clear after all. The U.S. bankruptcy trustee is suing the Ponzi King's wife, claiming he's found nearly $45 million in hidden monies. Are criminal charges next?
The bankruptcy trustee in charge of the Bernie Madoff case has sued Ruth Madoff in a civil complaint today, which may raise criminal questions about Mrs. Madoff to federal prosecutors. Among the recent developments, sources tell The Daily Beast:
- Ruth was arguing with the trustee even last night that this would leave her homeless.
- Regarding $45 million in apparently hidden funds connected to Ruth Madoff, “the U.S. Attorney is going to be furious,” says a source close to the investigation, referring to possible criminal charges.
- The trustee plans next to sue Peter and Shana Madoff, Bernie’s brother and niece, respectively.
The trustee's complaint outlined 111 separate transactions, including several multimillion dollar payments to Ruth in the weeks before and after the arrest of Bernard Madoff last December 11.
Trustee Irving Picard said the 68-year-old Ruth has been "living a life of splendor using the money of BLMIS (Bernard L. Madoff Investment Securities) customers. Regardless of whether or not Mrs. Madoff knew of the fraud her husband perpetrated...she received tens of millions of dollars from BLMIS...Mrs. Madoff had no good-faith basis to believe she was entitled."
Ruth Madoff's conduct included "fraudulent conveyances, breaches of fiduciary duties, conversions, and other wrongdoings."
The filing by Picard and his team from Baker Hostetler is part of an effort to uncover the web of international financing magic that Bernie Madoff—perhaps in concert with his wife and others—engaged in to keep his mammoth Ponzi scheme afloat and undetected over several decades.
Regarding possible criminal charges, “the U.S. Attorney is going to be furious,” says a source close to the investigation.
From the Picard complaint: “While Madoff’s crimes have left many investors impoverished and some charities decimated, Mrs. Madoff remains a person of substantial means. The inequity between Mrs. Madoff’s continuing financial advantages and the economic distress of Madoff’s customers compels the Trustee to bring this action. At this time, the Trustee has identified at least $44,822,355 that is subject to recapture from Mrs. Madoff.”
Even up until last night, as the trustee's office finalized the filing, sources tell The Daily Beast that Ruth was arguing with them that these actions would leave her homeless. Picard was unswayed. In the complaint, the trustee says Ruth Madoff got more than $3 million to pay her personal American Express bills over the last six years.
The trustee also outlined multimillion dollar payments made in Ruth Madoff’s name for a yacht, real-estate investments, and a company called PetCare RX. The complaint reveals she also owns nearly 45 percent of a company called Madoff Technologies, which made investments on her behalf as well as her sons, Mark and Andrew, her niece Shana, and Bernard Madoff’s brother Peter, all of whom, sources say, may soon be sued by the trustee.
Picard has sent lawyers around the world; they have uncovered money transfers in London, Gibraltar, Switzerland, and elsewhere, which his investigators believe represents efforts by the Madoffs to hide hundreds of millions of dollars, these sources say. There are more countries to come: Ireland is one scene of the trustee’s efforts to recover money the Madoffs moved through London. British sources have told The Daily Beast that Madoff gave his wife over $70 million from money laundered through London before he was arrested. Today's complaint says Ruth got $2 million through the Anglo-Irish Bank in London, less than three weeks before Bernie was arrested.
The Picard complaint also reads, “Regardless of whether or not Mrs. Madoff knew of the fraud her husband perpetrated at BLMIS, during the past two- and six-year statutory periods, she received tens of millions of dollars from BLMIS for which BLMIS received no corresponding benefit or value and to which Mrs. Madoff had no good-faith basis to believe she was entitled. The purpose of this action is to recover that money to the extent possible for the benefit of BLMIS and its defrauded customers.”
Picard notes that Ruth Madoff was listed as a "controller" of Madoff International Investment Securities, the British company used to move money.
When 71-year-old Bernard Madoff was sentenced to 150 years in prison June 29 by U.S. District Judge Denny Chin, part of the 11-count plea included a forfeiture agreement that cost Ruth the couples’ residences in Manhattan, Montauk, N.Y., Palm Beach, Fla., and the south of France, as well as their boats, private jet shares, and oodles of jewelry.
In response to the filing, Ruth Madoff's lawyer, Peter Chavkin, released a statement today, saying, “In the complaint filed today, the trustee does not allege that Ruth Madoff knew of or participated in her husband’s wrongdoing. To the contrary, the trustee is alleging that she should have to give up her remaining money even if she was completely unaware of her husband’s crimes… What makes this complaint particularly perplexing and totally unjustified however is the fact that Ruth already forfeited to the United States Attorney’s Office almost all of the assets named in this complaint—assets that the U.S. Attorney’s Office has publicly committed to distributing to the victims of Bernard Madoff’s Ponzi scheme. At the same time, after a thorough and comprehensive investigation, the U.S. Attorney’s Office determined that Ruth Madoff was entitled to keep property of $2.5 million because that property could not be linked to the fraud…We believe the trustee’s action is wrong as a matter of law and fairness."
As part of that deal, the Justice Department also agreed to give Ruth rights to $2.5 million and return her passport. Those moves were widely regarded in the press and in legal circles as signaling that Ruth, now 68, might escape criminal charges, despite the wishes of thousands of Madoff victims that she be prosecuted.
Well, Picard, the bankruptcy trustee, is not party to that deal and was free to sue her for her last nickel. And if those nickels are proven to include tens of millions of dollars in hidden funds, prosecutors will surely take notice. Regarding possible criminal charges, “the U.S. Attorney is going to be furious,” says a source close to the investigation.
Allan Dodds Frank is a business investigative correspondent who specializes in white collar crime. He also is President of the Overseas Press Club of America.
Lucinda Franks is a Pulitzer Prize-winning journalist and author who was on the staff of the New York Times and has written for the New Yorker and the New York Times Book Review and Magazine. Her latest book is My Father's Secret War, about her father, who was a spy for the OSS during World War II.
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Lloyd Grove is editor at large for The Daily Beast. He is also a frequent contributor to New York magazine and was a contributing editor for Condé Nast Portfolio. He wrote a gossip column for the New York Daily News from 2003 to 2006. Prior to that, he wrote the Reliable Source column for the Washington Post, where he spent 23 years covering politics, the media, and other subjects.
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Jacob Bernstein is a senior reporter at The Daily Beast. Previously, he was a features writer at WWD and W Magazine. He has also written for New York magazine, Paper, and The Huffington Post.
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Allan Dodds Frank is a business investigative correspondent who specializes in white collar crime. He also is President of the Overseas Press Club of America, one of the many journalism organizations that protests the arrests of journalists abroad and repression of freedom of speech.
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Allan Dodds Frank is a business investigative correspondent who specializes in white collar crime. He also is President of the Overseas Press Club of America, one of the many journalism organizations that protests the arrests of journalists abroad and repression of freedom of speech.
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Lucinda Franks is a Pulitzer Prize-winning journalist and author who was on the staff of the New York Times and has written for the New Yorker and the New York Times Book Review and Magazine. Her latest book is My Father's Secret War, about her father, who was a spy for the OSS during World War II.
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Lucinda Franks is a Pulitzer Prize-winning journalist and author who was on the staff of the New York Times and has written for the New Yorker and the New York Times Book Review and Magazine. Her latest book is My Father's Secret War, about her father, who was a spy for the OSS during World War II.
all money should have been ceased, she is in on it accounts are set up in her name although lawyers will end up with the bulk of this cash; and with the snail pace swiftness of the court system she will probably never make it to trial;;;;;;;;;;
You are incorrect no trial is needed here this is in Bankruptcy court just a signature of the judge to an order prepared by the trustee and its adone deal ; leaving her to then appeal. Ruth Maddof and the 2 Maddof sons and the secretary should all have been prosecuted for income tax evasion for the huge sums of money they ran up on corporate credit cards for personal shopping and trips which was paied by the corporation some months they ran rolling tabs in excess of 100k for each of them. Remember Leona helmsly did real time for maybe a 7k use of corporate artwork in her home.
This is crazy that she's not in jail for life too. How can anyone believe that she didn't know what was going on? I think some people at the SEC need to go to jail as well if not at the very least lose their jobs.
If this is true it calls into question the federal investigation into the criminal matter. How much is really out there and not only in Ruth Madoff's name but in the name of other "unindicted co-conspirators" as many were referred to in the Enron fruad. All of whom, by the way, were allowed to keep their ill-gotten gains.
Throw her in the Rancor pit.
I think some of these players, should have known, though it is entirely possible they did not know, especially if SEC didn't know, and also should have known, and probably had a greater duty to the public, and could have made Herculean efforts to know,one being investigating Madoff's accountant that would have been the missing link, the evidence of alleged no audit, fraudulent statements etc. Ruth could have not investigated the accountant, but SEC could have... Did they? Only after the fact.
Considering the accountant was the link, it would have been SEC with the power to be able to investigate. The biggest beneficiary, as far as I can see is IRS.
The SEC knew. They just chose to ignore it. One man testified that on several occasions he brought the scheme to the attention of the SEC. The poor guy finally dropped it after threats for his personal safety started rolling in. The SEC is the one that needs to be investigated IMO.
The short cut would have been to "discover" the Madoff's accountant. Not go through layers of bureaucracy, to decide if a rule had been broken, so send file to next layer of bureaucracy to find out if the next rule was broken, and if it wasn't broken give up. Madoff knew the rules inside out. It was the auditing which would have been the window, opening the door to discovery, how could have they let that go.
I think Ruth is probably being used as diversion, considering IRS probably benefited the most from the scheme not being discovered, or why didn't they check the most red of all red flags first, the insty bitsy accounting firm that couldn't have possibly audited that huge fund. Anyone would have known that. So possibly the money piled up in both camps through possible willful blindness of SEC too.
Bernie has funds in NYS Unclaimed Funds
Anyone who thinks Ruth Madoff is innocent is living in dreamland. Her and Bernie are joined at the hip and she knew everything that was going on. Too bad for them, they got caught. I have sympathy only for the people that Bernie stole from; his family is just like him and they deserve whatever they're found guilty of and that will still leave some crimes unaccounted for.
Who would shed a tear if all the Madoff family were either homeless or in jail? Greedy, fraudulent and heartless, all of them.
The crime here is on part of SEC and DA to allow this creature to keep any money. She's lied and deceived. Belongs in jail, and her assets seized ASAP.
Do not send her to jail. What would be far more cruel would simply be to seize all her assets and leave her without a dime. That would be truly CRUEL. Why put her in jail where she has a private room, 3 meals a day and social hour.
Let her work for a living...
Here here! The 1st sensible, thoughtful comment I heard on the matter...In fact I think the sensible thing to do to Bernie is to let him out penniless at age 90. Why should taxpayers pay $35k/yr to house him...Isn't that adding insult to injury?
Yes, let her work, but let her keep only the minimum-wage.
Everything else goes to the victims.
Please, give us a break Ruth. If you didn't know, what should you reap the profits of your husbands theft. He left many in ruins. Oh yeah, she also needs to have her health insurance cut off, so she can really join the masses. http://newsy1.wordpress,com
If these allegations are true, then what the hell has the SEC done about this except to sit on their asses AGAIN? Another totally useless government beauracracy. It appears that Picard is the only one doing the checking and chasing. Madoff should be tried like her husband and her ass thrown in the can if found guilty. These people have raped and pillaged to an extraordinary degree.
What a bunch of cruel bloggers! This nice little lady surely did not know what her gentleman husband was up to.
The next thing you angry people will be saying, is that Henry Paulson somehow lined the pockets of his Goldman Sach's brethern. Sheesh!!!
I would like her to become a cleaning lady for some of the families that she lived off of. All those stupid stunts of her riding the subway and buying a small apartment because that was all she could afford. When will they go after the sons?
Exactly...to a Ruth Madoff, riding the subway or living in an apartment is a "stupid stunt," while there are far too many people in New York City who wish they had subway fare and a place to live. If they are not sent to jail where they belong, this poor excuse for a woman and her spoiled offspring should be stripped of every penny and forced into homelessness. That might make an impact on them with regard to what it means to steal; any other punishment is moot when it comes to folks who have been living the good life for years on other peoples' money. It is hard to believe a group could be so self-centered and entitled that they don't understand why everyone, even those who were too poor to be ripped off by Bernie and company, would like to see them really suffer.
I think they are right to sieze all assets ,but I think they need to grab everyone who pulled money out .
The Bankruptsy court is saying it doesn't matter if she knew it was a ponzi or illegal, Well what is good for the goose is good for the gander and they are setting a precedent here all those people that took out need to give it back it does not matter if they knew it was ill gotten. It was someone elses money they got.
There are plenty of little people but I'm sorry that mil 50,000 it was not yours. If I were her lawyers I would press this issue unless they backed off.
They've been watching her like a hawk.
She wont get far.
We are dealing with Income Tax Evasion, lying to Federal Authorities, and being actively engaged in deceptive and illegal fiduciary behavior. So it's easy to put her away, and it's easier to seize the money before the shyster lawyers divvy it up.
We are really stupid to let this woman spend money stolen from investors who are further insulted and robbed by the totally immoral and criminal behavior of this creature.
This story is starting to sound like The Bonfire of Vanities.
The real tragedy is that there are lots of people in prison for a lot less (and I don't mean quantum of money but less of a connection to a crime)...
She wasn't too bright was she? I would have taken that $45Mill and buried it in the hills of Africa. Or I would have stuffed it in a dead deer. No way would they have been able to trace it.
That's would be a big fucking deer! Any matheletes to give an estimate of the dimensions of 45M? If she's soncing around town with Dolly Parton size implants soon........
I am sure there is more to this story than we are being told.
I wonder if Picard is just looking at assets that have already been handed over to the US attorney's office.
Why doesn't Picard go after IRS, considering how much money they got from this scheme, related to phantom earnings, that could be why SEC didn't try too hard to close Bernie down in 2005, which according to Madoff, (if you can believe him) and if I read it right, if he had been closed down, close to 20 billion in losses to investors would have been avoided.
She benefited from other people losing in a scheme cooked up by her husband. If they had had debts together, like some poor slob whose spouse racks up thousands on a credit card, they both are liable.
Losses, however, from the weaker parties occur all the time in this finance and banking business particularly. Almost like the goal is to find some weak person (who probably works hard as hell in his own job) - or entity - and prey on the guy to suck him dry. Really nasty group of people they are turning out to be, worse than loan sharks.
Throw that lying, other half of Madoff trash in a cell where she can be a maid for Big Momma. The idea the whole slimy Madoff Clan wasn't organic in this epic scam is like saying Jacko wasn't a homosexual pedophile or OJ didn't kill his ex-wife and her boyfriend. Justice would be seeing her a bag lady eating garbage -or- Big Momma's maid in the pen.
This comment from a pwincess Shana Madoff NewYorkMag feature on her "obsession and her extravagance":
"Hundreds of Ethiopian Israelis wont be getting medicine this year because Shana Madoff just loves the way her ass looks in designer pants. I'm sure all the sick and dying children feel their suffering is a small price though so pwincess Shana can have her Prada!"-by reaganmash
http://tinyurl.com/d3fugo
Ruthie and the boys, Peter and daughter Shana are all in it by omission or commission.
Let's hope for the best. What else may Ruth Madoff be hiding?
Once again someone makes an accusation, unproven, and everyone is off to the races trying, convicting, and sentencing the accused. The reason why the media in America is in such financial difficulty is simple. It is no longer credible in disseminating information.
It is quite obvious, dear Ruthy is as guilty as Bernie, it is time to squezze her with the thing she fear most,,, poverty and jail time. Unless of course she cuts a deal and sings about the rest of the tribe... never forget that her lavish lifestyle and criminal manipulation of monies left so many others ruined and now destitutue... at this time and based on her present behavior and action, no sympathy for this woman or her family.
Thank you.
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