15 March 2009

Saw that coming

The Guardian has an article by James Doran about the Madoff mess:
Federal prosecutors in New York and the Securities and Exchange Commission are preparing to file a legal action against Ruth Madoff, wife of jailed fraudster Bernie, amid fears that she will try to flee the United States or move her $70,000,000 fortune beyond their reach. Department of Justice sources said that prosecutors were "working around the clock" to build a criminal complaint against Mrs Madoff in an effort to ask a judge to freeze her bank accounts, which they believe are filled with the proceeds of her husband's crimes.
The SEC is understood to be liaising with the US Attorney's Office for the Southern District of New York to help prepare the asset freezing order. "What will happen," one SEC source said, "is that the US attorneys will be in court in the next week or so to tell a judge that they believe Mrs Madoff's assets are derived from ill-gotten gains and that they should be frozen for a certain period of time while the investigation is ongoing."
The judge will then decide whether there is sufficient reason to believe Mrs Madoff's assets were the proceeds of her husband's $64 billion Ponzi scheme.
After Madoff confessed his crimes to the FBI on 11 December, the Department of Justice moved quickly to file a criminal complaint against him while the SEC issued an order to freeze his assets. SEC sources indicated that Mrs Madoff would soon experience something similar. "When you file a criminal complaint in this way you do not need the case to be nailed down, you just need to be able to convince the judge that there is a strong probability that the funds in question came from crime," the SEC source said.
When Madoff pleaded guilty to eleven counts of fraud last week he claimed he ran the enterprise alone, without the knowledge of his wife or his two sons, Andrew and Mark, even though all three— and many more family members— were deeply involved in his business affairs. Investigators seeking to unravel Madoff's Ponzi scheme have focused on two wire transfers made by his wife just before his arrest. On 25 November, Ruth Madoff withdrew $5,500,000 from Cohmad Securities, a Massachusetts-based brokerage firm part owned by her husband. Then on 10 December, the day Madoff confessed his thefts to his sons and 24 hours before his arrest, she took an additional $10,000,000 from her account, filings show.
Now Mrs Madoff claims that some $69 million worth of her assets have no connection to her husband or his crimes. Among the assets she is desperate to keep are the $7,000,000 penthouse apartment on East 64th Street where Madoff was confined until he was jailed last Thursday, which is listed in her name; $45,000,000 in municipal bonds; and some $17,000,000 in cash.
Neither the SEC nor the US Attorney's Office for the Southern District of New York would comment about Mrs Madoff.
Rico asks where is she going to say all that money came from? Her day job?

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