According to the WSJ, the other shoe has dropped in the Madoff Ponzi scheme case. Irving Picard, the court appointed trustee in charge of recovering funds for Bernard Madoff’s victims is now suing Madoff’s wife, Ruth Madoff, for approximately $44.8 million.
“Irving Picard, the court-appointed trustee, alleged that 68-year-old Ruth Madoff "knew or should have known" that vast sums of money she received from her husband's investment firm, Bernard L. Madoff Investment Securities LLC, rightly belonged to the firm and to her husband's customers.”
“’For decades, Mrs. Madoff lived a life of splendor using the money of (Madoff’s) customers,’ Mr. Picard said in a lawsuit filed in U.S. Bankruptcy Court in Manhattan. ‘Regardless of whether or not Mrs. Madoff knew of the fraud her husband perpetrated at (his firm) ... she received tens of millions of dollars from (the firm) for which (the firm) received no corresponding benefit or value and to which Mrs. Madoff had no good-faith basis to believe she was entitled.’"
Of course the problem is that Ruth Madoff has already given up her rights the bulk of the cash she had withdrawn (just prior to Bernie Madoff’s arrest), and has already agreed to sell the marital real estate assets in Manhattan, Long Island and Palm Beach as part of restitution for investors. In an agreement with federal prosecutors she was allowed to keep about $2.5 million in cash. Not chump change, but not anywhere near the $44.8 million Picard is seeking.
I am also not aware of anything preventing individual investors from bringing civil litigation directly against her. In which case, the $2.5 million could disappear almost overnight in attorney fees. Finally there have been reports that she is having trouble finding a place to live, as she is persona non grata in Manhattan and some buildings have refused her.
Whether you feel sorry for her or not, one thing is certain, she is about to undergo an extreme adjustment in her standard of living.
-JP
(Photo ABOVE- Ruth Madoff is shown in an AP photo leaving a correctional facility after visiting her husband Bernie Madoff in April. Photo BELOW LEFT- Ruth and Bernie Madoff in happier times while at a desert party in Mexico- Rex USA. Photo BELOW RIGHT- The Madoffs on the yacht of real-estate tycoon Norman Levy. Vanity Fair)
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