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Sunday, January 11, 2009 12:42:40 PM
Madoff Brokerage, Homes, Boats Valued at $1 Billion
http://www.bloomberg.com/apps/news?pid=20601103&sid=aqx3zXxMVtpI&refer=news
Jan. 9 (Bloomberg) -- Victims of Bernard Madoff’s alleged $50 billion Ponzi scheme may have access to as little as $1 billion in assets to satisfy their claims, based on the value of his defunct brokerage, real estate, boats, jewelry and other property identified so far by liquidators and investigators.
Federal investigators said yesterday they found 100 Madoff- signed checks totaling $173 million in the investment adviser’s desk, ready for mailing. The trustee liquidating Madoff’s brokerage said he had located $830 million in “liquid assets” at the firm to meet claims. The brokerage itself may fetch $40 million in a sale “at best,” estimated Larry Tabb, founder of TABB Group, a financial-market research and advisory firm.
Investors caught in a massive fraud often incur large losses. Creditors of bankrupt Enron Corp., which hid billions of dollars in debt in off-the-books entities, received 36 cents on the dollar as of January 2008.
“Depending on the solvency of the persons sued, recoveries will probably be in the range of 10 percent to 50 percent of the amounts for which the persons are liable,” said Lynn LoPucki, who teaches bankruptcy law at the University of California at Los Angeles.
Madoff, 70, was arrested on Dec. 11 at his Manhattan apartment and charged with one count of securities fraud. Victims range from New York University to philanthropist Carl Shapiro. Confined to his Upper East Side home with an armed guard and surveillance cameras on every door, Madoff faces as long as 20 years in prison as well as a $5 million fine if convicted. Prosecutors will seek forfeiture of his assets to pay victims.
House Arrest
Madoff was put under house arrest after being accused of operating the fraud. In addition to his Manhattan apartment, he has nine other properties, including a $3 million house in Montauk, New York, that he jointly owns with his wife, according to public records and his lawyer, Ira Sorkin.
Madoff also owns four boats and three cars, according to Sorkin, who disclosed the asset details in a Jan. 7 letter to the federal judge in charge of Madoff’s criminal case, urging him not to send his client to jail for violating an asset-freeze order. Prosecutors asked that Madoff’s $10 million bail be revoked because he transferred more than $1 million in jewelry and other personal items to friends and relatives in late December. The government has since recovered most of the items.
A complete list of assets held by Madoff and his wife, who hasn’t been charged with any crime, was provided in a confidential tally to the U.S. Securities and Exchange Commission, which sued Madoff, accusing him of securities fraud. The agency and Sorkin have declined to release details of the filing, other than a reference in the Jan. 7 letter to “several million dollars” in jewelry.
10 Addresses
U.S. public records show 10 addresses for Madoff, including his penthouse on 64th Street, his Third Avenue office, a Wall Street apartment, three Palm Beach properties and one home in Key Largo, Florida. Some are jointly owned with his wife. His 56-foot pleasure boat, made by Rybovich & Sons in 1969, is named “Bull,” according to registration documents.
Madoff’s bail conditions set Dec. 19 in New York court included a $10 million bond secured by his wife’s homes in Manhattan, Montauk, New York, and Palm Beach, Florida, “worth over $19 million,” according to Sorkin’s letter.
Ruth Madoff, who co-edited a cookbook, “The Great Chefs of America Cook Kosher,” paid $3.8 million for a Palm Beach property on North Lake Way in 1994, according to county deed records. A 38-foot, 2003-made boat called “Sitting Bull” is registered in her name.
The Madoff Family Foundation, run by Bernard and Ruth, had assets of $19.1 million at the end of 2007, according to a filing with the Internal Revenue Service. Ruth Madoff resigned from the board of the Queens College Foundation in New York on Dec. 15, a spokeswoman said.
Madoff said his bank accounts contained $300 million or less when he confessed the fraud to his sons before his Dec. 11 arrest, according to federal investigators. The U.S. Securities and Exchange Commission the same day froze his and his wife’s accounts as part of a civil lawsuit, though the trustee liquidating the brokerage won court approval Dec. 30 to use $28 million from the firm’s accounts.
Prosecutors asked U.S. Magistrate Judge Ronald Ellis in Manhattan on Jan. 5 to jail Madoff after he mailed personal items, including a diamond bracelet, mittens and Tiffany and Cartier watches, to family and friends in violation of a court- ordered asset freeze in the SEC case.
Sorkin gave new details about the Madoffs’ assets, including a house in Antibes, France, in his letter to Ellis, saying Madoff would agree to “restrictions on transfer of all property” as an extra measure to stay out of jail on bail.
Asset Freeze
Sorkin said Madoff’s wife Ruth also would agree to a freeze of her assets and bank accounts, formalizing a voluntary agreement reached Dec. 26 with the U.S. Attorney’s Office in Manhattan. Jewelry would be put in a vault, or an inventory of “reasonably portable items” of value would be made and checked twice weekly by a security firm, he said.
The bank-account freeze allows Ruth Madoff an unspecified amount to pay monthly living expenses, property insurance, legal fees and the costs of the security to keep Madoff at home. She is obliged to deliver expense receipts to the U.S. Attorney’s Office at the end of each month, according to the letter.
In a Ponzi scheme, investors are paid as long as more money comes in than goes out. Redemptions, and fees paid to funds that funneled money to Madoff, consumed large amounts of assets in the end. Investors in Fairfield Greenwich Group’s Fairfield Sentry fund, one of Madoff’s so-called “feeders,” seek to recover $1 billion in fees, according to a proposed group lawsuit filed yesterday in Manhattan federal court.
The U.K.’s Serious Fraud Office said yesterday it will investigate Madoff’s U.K. operations, which managed his family’s personal funds. The London-based unit, Madoff Securities International Ltd., transferred 100 million pounds ($152 million) to its U.S. parent in response to a Nov. 12 phone call from Madoff, the Financial Times reported today.
The case is U.S. v. Madoff, 08-mag-2735, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net.
Last Updated: January 9, 2009 11:43 EST
http://www.bloomberg.com/apps/news?pid=20601103&sid=aqx3zXxMVtpI&refer=news
Jan. 9 (Bloomberg) -- Victims of Bernard Madoff’s alleged $50 billion Ponzi scheme may have access to as little as $1 billion in assets to satisfy their claims, based on the value of his defunct brokerage, real estate, boats, jewelry and other property identified so far by liquidators and investigators.
Federal investigators said yesterday they found 100 Madoff- signed checks totaling $173 million in the investment adviser’s desk, ready for mailing. The trustee liquidating Madoff’s brokerage said he had located $830 million in “liquid assets” at the firm to meet claims. The brokerage itself may fetch $40 million in a sale “at best,” estimated Larry Tabb, founder of TABB Group, a financial-market research and advisory firm.
Investors caught in a massive fraud often incur large losses. Creditors of bankrupt Enron Corp., which hid billions of dollars in debt in off-the-books entities, received 36 cents on the dollar as of January 2008.
“Depending on the solvency of the persons sued, recoveries will probably be in the range of 10 percent to 50 percent of the amounts for which the persons are liable,” said Lynn LoPucki, who teaches bankruptcy law at the University of California at Los Angeles.
Madoff, 70, was arrested on Dec. 11 at his Manhattan apartment and charged with one count of securities fraud. Victims range from New York University to philanthropist Carl Shapiro. Confined to his Upper East Side home with an armed guard and surveillance cameras on every door, Madoff faces as long as 20 years in prison as well as a $5 million fine if convicted. Prosecutors will seek forfeiture of his assets to pay victims.
House Arrest
Madoff was put under house arrest after being accused of operating the fraud. In addition to his Manhattan apartment, he has nine other properties, including a $3 million house in Montauk, New York, that he jointly owns with his wife, according to public records and his lawyer, Ira Sorkin.
Madoff also owns four boats and three cars, according to Sorkin, who disclosed the asset details in a Jan. 7 letter to the federal judge in charge of Madoff’s criminal case, urging him not to send his client to jail for violating an asset-freeze order. Prosecutors asked that Madoff’s $10 million bail be revoked because he transferred more than $1 million in jewelry and other personal items to friends and relatives in late December. The government has since recovered most of the items.
A complete list of assets held by Madoff and his wife, who hasn’t been charged with any crime, was provided in a confidential tally to the U.S. Securities and Exchange Commission, which sued Madoff, accusing him of securities fraud. The agency and Sorkin have declined to release details of the filing, other than a reference in the Jan. 7 letter to “several million dollars” in jewelry.
10 Addresses
U.S. public records show 10 addresses for Madoff, including his penthouse on 64th Street, his Third Avenue office, a Wall Street apartment, three Palm Beach properties and one home in Key Largo, Florida. Some are jointly owned with his wife. His 56-foot pleasure boat, made by Rybovich & Sons in 1969, is named “Bull,” according to registration documents.
Madoff’s bail conditions set Dec. 19 in New York court included a $10 million bond secured by his wife’s homes in Manhattan, Montauk, New York, and Palm Beach, Florida, “worth over $19 million,” according to Sorkin’s letter.
Ruth Madoff, who co-edited a cookbook, “The Great Chefs of America Cook Kosher,” paid $3.8 million for a Palm Beach property on North Lake Way in 1994, according to county deed records. A 38-foot, 2003-made boat called “Sitting Bull” is registered in her name.
The Madoff Family Foundation, run by Bernard and Ruth, had assets of $19.1 million at the end of 2007, according to a filing with the Internal Revenue Service. Ruth Madoff resigned from the board of the Queens College Foundation in New York on Dec. 15, a spokeswoman said.
Madoff said his bank accounts contained $300 million or less when he confessed the fraud to his sons before his Dec. 11 arrest, according to federal investigators. The U.S. Securities and Exchange Commission the same day froze his and his wife’s accounts as part of a civil lawsuit, though the trustee liquidating the brokerage won court approval Dec. 30 to use $28 million from the firm’s accounts.
Prosecutors asked U.S. Magistrate Judge Ronald Ellis in Manhattan on Jan. 5 to jail Madoff after he mailed personal items, including a diamond bracelet, mittens and Tiffany and Cartier watches, to family and friends in violation of a court- ordered asset freeze in the SEC case.
Sorkin gave new details about the Madoffs’ assets, including a house in Antibes, France, in his letter to Ellis, saying Madoff would agree to “restrictions on transfer of all property” as an extra measure to stay out of jail on bail.
Asset Freeze
Sorkin said Madoff’s wife Ruth also would agree to a freeze of her assets and bank accounts, formalizing a voluntary agreement reached Dec. 26 with the U.S. Attorney’s Office in Manhattan. Jewelry would be put in a vault, or an inventory of “reasonably portable items” of value would be made and checked twice weekly by a security firm, he said.
The bank-account freeze allows Ruth Madoff an unspecified amount to pay monthly living expenses, property insurance, legal fees and the costs of the security to keep Madoff at home. She is obliged to deliver expense receipts to the U.S. Attorney’s Office at the end of each month, according to the letter.
In a Ponzi scheme, investors are paid as long as more money comes in than goes out. Redemptions, and fees paid to funds that funneled money to Madoff, consumed large amounts of assets in the end. Investors in Fairfield Greenwich Group’s Fairfield Sentry fund, one of Madoff’s so-called “feeders,” seek to recover $1 billion in fees, according to a proposed group lawsuit filed yesterday in Manhattan federal court.
The U.K.’s Serious Fraud Office said yesterday it will investigate Madoff’s U.K. operations, which managed his family’s personal funds. The London-based unit, Madoff Securities International Ltd., transferred 100 million pounds ($152 million) to its U.S. parent in response to a Nov. 12 phone call from Madoff, the Financial Times reported today.
The case is U.S. v. Madoff, 08-mag-2735, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net.
Last Updated: January 9, 2009 11:43 EST
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