How Madoff’s wife pocketed $US16m

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The wife of disgraced US money manager Bernard Madoff withdrew more than $US15 million from a firm co-owned by her husband just before his alleged $US50 billion fraud scheme collapsed, authorities say.

Massachusetts secretary of state William Galvin has filed a complaint in which Madoff’s wife Ruth is said to have withdrawn $US15.5 million from a Madoff-linked brokerage ahead of his arrest and alleged confession.

Galvin said Ruth Madoff, 67, withdrew $US5.5 million on November 25 and $US10 million on December 10 – the day before Bernard Madoff was arrested – from Cohmad Securities Corp, a New York firm co-owned by her husband.

Galvin is seeking to have the brokerage banned from operating in Massachusetts over what he says is the failure to co-operate with investigators probing its dealings with Madoff.

Ira Sorkin, a lawyer for Bernard Madoff, said he had no comment on the withdrawals, and a Cohmad spokeswoman in New York said the company also had no comment.

Galvin’s complaint appeared to follow what authorities consider a disturbing trend on the part of the Madoffs to hide money that could be used to reimburse burned investors.

Prosecutors have already said investigators found 100 signed cheques worth $US173 million that Madoff was ready to send out to his closest family and friends at the time of his arrest in December.

Two weeks later, during the Christmas holidays, Madoff sent more than $US1 million in jewellery and heirlooms to family and friends.

In New York, meanwhile, the government and lawyers for Madoff agreed to a 30-day delay in the Wednesday deadline for obtaining a grand jury indictment against the money manager.

The next deadline for indicting Madoff and bringing him to trial is March 13. A similar delay was made in January.

The latest delay by prosecutors in indicting Madoff stoked speculation that the former Nasdaq stock exchange chairman is attempting to negotiate a guilty plea over charges that he ran a $US50 billion pyramid fraud.

Defence lawyers and prosecutors often agree on such delays to give both sides time to work out a guilty plea and move straight to sentencing without trial, legal experts say.

Madoff was arrested on December 11 after allegedly confessing to his two sons and to the FBI that he had run a giant scam known as a pyramid scheme, where new investors’ money is stolen to pay profits to existing clients.

Madoff is free on $US10 million bail but confined to his New York apartment under round-the-clock surveillance.

So far, Madoff is the only person charged in what could be the biggest such fraud in Wall Street history.

However, family members are among those who have come under the spotlight as investigators probe whether one man could have managed the alleged scheme by himself.

Since Madoff’s arrest, investigators have been assessing the financial damage inflicted on thousands of people who lost money investing with him.

The victims identified so far have included ordinary people and Hollywood celebrities, along with large hedge funds, international banks and charities in the US, Europe and Asia.

AP

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