(Corrects verb tense in headline in story published yesterday.)
Ruth Madoff’s account at Bank of New York Mellon Corp. (BK) received “fraudulent” transfers of at least $14 million, said the trustee liquidating her husband Bernard Madoff’s firm, who wants to “recapture” $44.8 million.
Irving Picard, the trustee, said last week that he had asked the bank for the couple’s monthly bank statements, canceled checks and other records from January 2002 through December 2008. Bank of New York had no objection to providing them, he said in the March 10 filing in U.S. Bankruptcy Court in Manhattan.
Money going into Ruth Madoff’s personal bank account came from the imprisoned fraudster’s companies, which received nothing in return, Picard said in previous filings. When Bernard Madoff’s Ponzi scheme collapsed in 2008, the funds became the property of his customers, Picard said in his 2009 lawsuit against Ruth Madoff.
She is due to respond to the suit by March 31. She forfeited houses, jewels and bank accounts to the U.S. government in June 2009, according to a list attached to the forfeiture order.
In the Bank of New York account, some transfers masqueraded as interest payments on loans made by Madoff companies, which should have gone to the businesses and not to the owner’s wife, Picard said. A $2.3 million deposit originating in the Madoff brokerage was used “for the purchase of a yacht for the personal enjoyment of Mrs. Madoff and her family,” Picard said.
Picard said in the 2009 suit he wanted to reclaim for investors Ruth Madoff’s $44.8 million profit from the fraud. In February, she was named in Picard’s $1 billion suit against the Mets baseball team owners. Ruth and her family invested $12 million of “other people’s money” in Sterling Equities Inc. entities, which Picard said he wants back.
The Madoffs, who often invited the families of Saul Katz and Fred Wilpon, partners in Sterling Equities, to family celebrations, cocktail parties and dinners, used funds from the Madoff brokerage for their own benefit in making investments in Sterling entities, Picard said in the Feb. 4 lawsuit.
Ruth Madoff’s lawyer, Peter Chavkin, declined to comment.
U.S. marshals seized the $7 million Manhattan home Ruth Madoff shared with her husband in the year after the fraud was exposed in 2008. Marshals sold the Madoffs’ Montauk, New York, home for $9.4 million. Ruth’s 14-carat diamond earrings sold for $70,000 in a Manhattan auction, and her 1999 Mercedes Benz went for $30,000.
“Any and all accounts at financial institutions” in her or her husband’s name also were claimed by the U.S. in 2009, according to court filings.
Amanda Remus, a Picard spokeswoman, declined to comment on the case.
Picard has sought a total of $198.7 million from Peter Madoff, Ruth’s sons Mark, who committed suicide in December, and Andrew, and Bernard Madoff’s niece Shana Madoff Swanson, who all had jobs at the defunct firm.
In all, Picard has filed more than 1,000 lawsuits seeking $100 billion from 4,000 defendants, partly to compensate investors in the Ponzi scheme who lost $20 billion in principal. The trustee will use any extra money he gets to pay creditors who provided services to Madoff’s firm, and to give investors some of the fake profit they thought they had earned in the scheme, he said in a statement yesterday.
The case is Picard v. Madoff, 1:09-ap-1391, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Linda Sandler in New York at firstname.lastname@example.org.
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