June 26 (Bloomberg) -- Bernard Madoff’s apartment in Manhattan and his houses in Palm Beach, Florida, and in Montauk on the east end of New York’s Long Island will be sold by U.S. marshals, according to a ruling by Denny Chin, the judge in charge of Madoff’s criminal case.

Madoff approved an agreement with prosecutors and he and his wife Ruth agreed to sell the properties to raise money to pay back victims of his $65 billion Ponzi scheme, the biggest in history. The orders don’t require Ruth Madoff to leave the couple’s apartment at 133 East 64th St. in Manhattan before the sale. Bernard Madoff has been incarcerated at a federal jail in New York since pleading guilty in March.

Chins’s order requires Madoff to forfeit $170 billion, eliminating his interest in all real estate, investments and other property, according to a statement today by Acting U.S. Attorney Lev Dassin in Manhattan.

Ruth Madoff will retain $2.5 million while giving up her claims to more than $80 million in assets under an agreement approved by Chin, prosecutors said. She has said she had $45 million in bonds and $17 million in cash that were “unrelated” to her husband’s scheme.

Ira Sorkin, the lawyer for Bernard Madoff, said the documents speak for themselves. Peter Chavkin, the lawyer for Ruth Madoff, didn’t immediately return a call seeking comment.

Bernard Madoff pleaded guilty in March 12 to federal charges that he used funds from new investors to pay off other clients in the Ponzi scheme. His customers were told they had as much as $65 billion in the weeks before the fraud came to light.

Cars, Boats, Piano

Madoff will also sell Mercedes-Benz and Volkswagen automobiles, boats and trailers by Chin’s order. Also to be sold are his $39,000 Steinway piano and $65,000 worth of silverware, now located in the Manhattan apartment.

Prosecutors have identified 1,341 Bernard L. Madoff Investment Securities LLC account holders who collectively suffered losses of more than $13 billion.

Madoff confessed in December after a flurry of redemption requests by his customers. He pleaded guilty to securities fraud, mail fraud, wire fraud, investment adviser fraud, three counts of money laundering, false statements, perjury, false filings with the SEC and theft from an employee benefit plan. Madoff, who didn’t have a plea deal with prosecutors, will be sentenced separately on each count.

Madoff faces a prison term of as many as 150 years when he is sentenced on June 29.

The case is U.S. v. Madoff, 09-cr-00213, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: David Glovin in U.S. District Court in New York at dglovin@bloomberg.net; Thom Weidlich in New York at tweidlich@bloomberg.net.

Last Updated: June 26, 2009 21:32 EDT