CityWire.co.uk – Bernard Madoff’s wife Ruth is being sued for $44.8 million (€31.9 million) by the trustee for the victims of his $50 billion Ponzi scheme.

Court-appointed trustee Irving Picard is the first person to take action against Madoff’s family members, all of whom have denied knowledge of the scam.

Picard’s lawsuit states: ‘Regardless of whether or not Mrs Madoff knew of the fraud her husband perpetrated…she received tens of millions of dollars…to which Mrs Madoff had no good faith basis to believe she was entitled.’

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New York (Hedgeco.Net) – Bernard Madoff was finally promoted from house arrest to maximum security prison, after pleading guilty to the largest Ponzi scheme in history.  Madoff, who swindled an estimated $65 billion out of the most elite investors, could face up to 150 years of prison.  

“I operated a Ponzi scheme through the investment advisory side of my business,” Madoff admitted to U.S. Judge Denny Chin at the hearing, referring to Bernard L. Madoff Investment Securities LLC.  He did contend that his U.K.-based affiliate, Madoff Securities International along with the units run by his two sons were all legitimate entities.

“I am actually grateful for this opportunity to publicly speak about my crimes, for which I am so deeply sorry and ashamed,” Madoff confessed in the Manhattan courtroom.  “I knew what I was doing was wrong, indeed criminal.”

Madoff spent years building up a stellar reputation with the rich and famous, many of whom invested their life savings with him.  Madoff told the judge he started feeling pressure in the early 90’s to deliver the consistent returns that his investors expected.  This jump started the staple Ponzi scheme action of using new capital coming in to pay returns to existing investors.

Instead of investing in securities like he promised his clients, Madoff instead deposited their cash into an account at Chase Manhattan Bank, where he would withdraw funds as needed for investor redemptions.

“I believed it would end shortly, and I would be able to extricate myself,” he said of the scheme.  “As the years went by, I realized that my arrest and this day would inevitably come.”

Madoff’s sons have not been charged with any wrongdoing, nor have any employees at his New York City headquarters although investigations are still in the works.  Attorneys for Madoff’s wife, Ruth, state that she was the sole owner of their Manhattan apartment, along with $17 million in cash and $45 million in bonds.

Madoff’s attorney, Ira Sorkin said he would appeal the jailing before his sentencing hearing on June 16.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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New York (HedgeCo.Net) – While authorities are trying to locate and freeze all of the assets of admitted Ponzi schemer Bernard Madoff, lawyers representing his wife, Ruth, claim that she has millions in assets, all independent of her husband’s scam.

In an order filed yesterday, it was disclosed that Ruth Madoff owns $45 million in municipal bonds, and a New York City apartment.  Ruth also apparently isn’t facing any liquidity crunch; she has $17 million in cash sitting in a Wachovia bank account.

U.S. District Judge Louis Stanton wrote that “some of the assets covered by the relief order are unrelated to the alleged Madoff fraud and only Ruth Madoff has a beneficial ownership in these assets.”

Earlier last month, Bernard Madoff agreed to a permanent freeze on his assets, without admitting or denying fraud charges.  

Mr. Madoff has contested that he worked alone, however doubts surfaced when Mrs. Madoff withdrew $15.5 million from a brokerage account in her name in the weeks leading up to her husband’s arrest.  The account was with Cohmad Securities Corp., an entity part owned by her husband.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com 

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