Madoffs Worth More Than $823 Million

NEW YORK — By all accounts, Bernard Madoff isn't talking. And his wife, his sons, his brother and other key employees have lawyered up. That means it could be a while before anyone else is arrested and the full extent of Madoff' vast swindle comes to light. Given the size of the paper trail _ a $65 billion scam, 5,000 victims and monthly statements going back nearly two decades _ experts say it could be six months to a year before charges are bought against any accomplices.

The day after Madoff was thrown behind bars, investigators returned Friday to the arduous task of piecing together one of the largest frauds in history _ and trying to determine if anyone else was involved.

The FBI has refused to discuss the status of the investigation. But experts say it's certain Madoff's closest relatives and associates are high on authorities' list of people who may have known what was going on.

Madoff pleaded guilty Thursday to 11 charges, including fraud, perjury and money laundering. He faces a maximum sentence of 150 years in prison, and the judge immediately jailed him _ a decision his lawyers asked an appeals court to reverse on Friday.

Any potential suspects "are not better or worse off than they were before the plea," said Christopher Clark, a former federal prosecutor in Manhattan.

Also Friday, newly filed court documents showed Madoff and his wife had a combined net worth of more than $823 million at the end of last year, including a $7 million yacht and four properties worth a total of $22 million. Last month, a court-appointed trustee overseeing the liquidation of Madoff's firm reported that about $1 billion in assets had been recovered from the business.

Part of the delay in charging any accomplices may be a lack of cooperation from key employees.

Among those under scrutiny is Madoff's wife, Ruth, who withdrew $15.5 million from a Madoff-related brokerage firm in the weeks before Madoff's Dec. 11 arrest, including a $10 million withdrawal on Dec. 10.

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Passing references to Ruth Madoff during her husband's guilty plea Thursday drew laughter from a mocking audience of investors still bristling over a disclosure several weeks ago that she wants to keep $69 million in assets, including the couple's $7 million Manhattan penthouse.

In addition, she faces potential civil litigation as a result of the collapse of her husband's financial empire. Her lawyer has declined to comment.

Also on investigators' radar is Madoff's 63-year-old brother, Peter, who was instrumental in building Madoff's investment firm.

In the days following his brother's arrest, Peter Madoff helped regulators examine the company's books, his lawyer said at the time.

But the brother resigned about a week later and, like the rest of the family, has never spoken publicly about the case.

Madoff sons Andrew, 42, and Mark, 45, also worked for their father in a trading operation he has insisted was legitimate and separate from his fraudulent investment advisory service.

The sons, who shared their father's extravagant lifestyle, also have denied any wrongdoing through their attorney. The lawyer has called them victims of the scheme and claimed they had "no access to overall financial information about their father's firm."

Besides the family, investors have questioned the role of Frank DiPascali, chief financial officer of Madoff's money management business.

A lawyer for DiPascali declined to comment on Friday. Those for the brother and sons did not immediately return telephone messages.

So far, federal authorities are believed to have spoken to several clerks who handled some of the voluminous paperwork Madoff admits he fabricated, including tens of thousands of fake account statements.

During his plea, the defendant claimed he started the scheme as a short-term way to withstand the early-1990s recession _ a timetable at odds with what authorities have alleged, that the giant Ponzi scheme began at least as early as the 1980s.

On Thursday, Madoff took all the blame for his fraud and tried to create a wall between himself and his family, telling the court his "other businesses" _ proprietary trading and market making _ were "legitimate, profitable and successful in all respects."

He then added: "Those businesses were managed by my brother and two sons."

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AP's News Research Center contributed to this report.

Comments

[garymc8]

TAKE EVERY DIME SHE AND ANY OF HIS CHILDREN HAVE. Leaving them HOMELESS AND PENNILESS would serve as a warning to others. They never cared about those they stole from so why should we care about ANY OF THEM. Just STEAL EVERYTHING THEY HAVE.

[Horst]

Madoff is small potatoes compared to the crooks at AIG, Citibank...just about every major American, Swiss and European banking organization.

[Linda Posner]

let him serve the homeless and let his wife clean the homeless shelter's toilets

[Romeover]

While the Madoffs may control more than $823 million, only a warped mind would claim they are worth that much.

[mapleaforever]

You mean used to be worth $823 million?

[esquire07]

Stupid Bernie... He should have commited War Crimes, which are completely legal in the US, unlike financial Fraud. Just ask Bush and Chney who have made untold millions off the deaths of US troops.

[Horst]

You missed the AIG bonuses....America is truly going belly up.

[LizzieTish]

Bulltickie -- keep looking boys; he's robbed much more than that - add another digit and you'll be closer. Check off-shore.

[ishok]

A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned.

"When I began the Ponzi scheme I believed it would end shortly and I would be able to extricate myself and my clients from the scheme.” – Bernard Madoff

My questions are: who were the “clients” mentioned here? Were they 4 or 5 people or were they hundreds? How many of the folks we see crying for sympathy are actually these “clients” that clearly were at least loose participants in this scheme? What I know is this, a lot of folks persuaded a lot of folks to come in on this thing. I also know that a lot of folks are standing outside that courthouse crying victim.

I’m not trying to defend Madoff he is guilty and admits it. I just propose that the process of sorting this out is not as elementary as you might initially think. Did anyone ever see Madoff’s operation mentioned in Money magazines best performers or was is initially a closed circle - invitation only - word of mouth sort of thing?
If so, should we be spending so much of our emotional capital on this?

[jaslyn]

I think everyone who worked for him, his sons and his wife, knew exactly what he was doing, and were payed very well to play along of their own volition. They, and their investors were overly enamored with the returns, and decided to look the other way, don't ask questions, and just enjoy the profits. The investors are not entirely blameless; they should have asked more questions.

[Lindy22]

Madoffs worth $823 million?!! No, these are worthless people who have amassed 823 million of other people's money.

[princessofnowt]

Thinking about Madoff in jail, how he wants out after one night-
if the prisons are not fit for him and the rest of the "white collar crime" (which should now be considered more dangerous than so-called dangerous criminals who destroy people one at a time by violence while the white collar criminals destroy millions by stealth) then we need to examine why we have allowed our prisons to be run so badly.
I think any prisons that have been privatized need to be taken back over, and the whole system needs examining.
There shouldnt be two standards based on the comforts one is accustomed to, such as not being stabbed while in the yard vs tivo in your private/semi room.
If it is not fit for one it is not fit for the other.

[timetorevolt]

As an IT person with experience supporting financial applications, I would like to know how the fake statements were generated. Did the programmer hard code the data or was it just fake data entered
in a system? A lot of people had to know about this scam because I doubt he and his wife was generating the monthly statements when a pen and a pencil.

[treetracker]

From what I understand that is exactly what they were doing. No computerized statements. THAT should have been the first clue!

[Lvm]

Actually they aren't worth 800+ million, their clients were. I don't think Madoff should be in jail. He should be forced to sell all assets, work for minimum wage the rest of his life, while making restitution from his minimum wage earnings. When I lost money with Worldcom, I learned a valuable lesson...invest at your own risk. There are no guarantees. And there are a lot of Bernie Madoffs out there.

[jadeba]

All of their money was made through fraud and all of it should be taken from them. They invested their own funds in legitimate investment firms but where did that money come from? And, as he was fleecing others, the notion that his legit investments are somehow separate from the ponzi scheme is ludicrous. Great article in Vanity Fair this month. Ruth should be jailed, too. She knew enough to withdraw about 15 million shortly before the scheme collapsed.

I do feel for his victims but that only goes so far - many of them were warned, none of them bothered to check and see whether their money was, in fact, being traded and most of those who were warned just circled the wagons around Bernie. Those who did their due diligence, didn't buy in, didn't hand their money over to Bernie. The others were making money when it did not make sense - they didn't question, they just cashed the checks.

[BeltwayBette]

I agreewith this writer. All assets but the very limited "need to live on as most folks live -- minus yachts, rare properties, art, whatever -- be confiscated and used to pay back the investors.

I do not separate one investor ffrom another; I think those who criticize the investors are out to lunch. Many of these folks were working very very hard on their own careers and trusted this "financial genuis." never suspecting that he was a genius at conning trusting victims.

Strip the man and his wife -- who had to know what was going on -- and pay back the victims.
Just as we all should insist that AIG and other party goers who used taxpayer dollars to live it up -- get clawback visits from the Treasury agents.

[HMDMSR]

posted by quantumspin on the Kevin Phillips blog.

In late 1999, Bill Clinton signed the Gramm act which removed the Glass-Stegall Act that regulated the banks and financial industry. Here is what Clinton had to say about this, and what Treasury Secy Larry Summers had to say, from a NYT article in 1999 shortly after Clinton signed the bill:

"When this potentially historic agreement is finalized," Clinton said
in a statement, "it will strengthen the economy and help consumers,
communities and businesses across America."

Treasury Secretary Lawrence H. Summers said in an interview, "At
the end of the 20th century, we will at last be replacing an archaic
set of restrictions with a legislative foundation for a 21st-century
financial system." The measure, he added, "would provide
significant benefits to the national economy."

I repeat, this was in 1999. And here we are in 2009, with Summers in
the Obama administration. No wonder we're seeing nothing happen on Main Street--they don't care about Main Street. Only the banks. Just like 1999.

source:
http://partners.nytimes.com/library/financial/102399banks-congress.html

[jadeba]

Clinton and Summers and Greenspan and the rest were wrong, wrong, wrong. I think they all know it now. People change with changing facts - unless you're a Bushie. I'll give Summers the benefit of the doubt - saw him and he made sense. I'm not the same person I was in 1999 and would hope that people don't expect me to be or hold me to everything I said or did then.

[treetracker]

That bill alone may not have had the impact it had until it was coupled with the leverage change from 12/1 to 35-40/1 that Paulson demanded and got while he was CEO of Goldman Sachs. The Gramm bill allowed them to become "too big to fail" - the change in the leverage ratio allowed them to go bust. Had the leverage rule not been changed, there is no way the housing foreclosures would have had the effect it had. Would have been just a blimp on the screen. But rather than admit that, they are using the "loser" homeowners as their scapegoat. And a lot of the public (particularly those on the right) with the help of the media is buying into it. I mean, gosh, we wouldn't want to blame the bankers, now would we? So much easier to blame those "losers!"

[HMDMSR]

I don't accept that. Summers has dogmatic views on this issue. Kevin Phillips' criticism is right on. Summers' dogma has a name--neoliberalism. Just as Milton Friedman was the neoliberal guru for the Tories and Republicans, so Summers has been for the Democrats. President Obama has naively allowed this movement to tunnel into his administration, providing big business--especially finance--an organizing point for its counterattack.