Now in Legal Rebels:
Posted Jul 29, 2009 10:04 pm CDT
A court-appointed trustee charged with recovering money for investors in the Ponzi scheme operated by Bernard Madoff under the guise of a hedge fund has sued the jailed swindler’s wife for almost $45 million.
Ruth Madoff knew or should have known her “life of splendor” was funded with ill-gotten gains from his investment firm, trustee Irving Picard contends in the suit, which was filed today in U.S. Bankruptcy Court in Manhattan. However, a lawyer for Ruth Madoff called the suit unfair and unreasonable, saying that his client has already forfeited her claim to some $80 million in assets, reports the Wall Street Journal (sub. req.).
Picard, on his side, says that Ruth Madoff still has substantial assets, while a number of once-wealthy investors in Bernard L. Madoff Investment Securities LLC, or BLMIS, were impoverished by her husband’s $65 billion scheme.
“For decades, Mrs. Madoff lived a life of splendor using the money of BLMIS’s customers,” he says in the suit. “Regardless of whether or not Mrs. Madoff knew of the fraud her husband perpetrated at BLMIS … she received tens of millions of dollars from BLMIS for which BLMIS received no corresponding benefit or value and to which Mrs. Madoff had no good-faith basis to believe she was entitled.”
Under federal law, Picard can sue to recoup company assets paid out for up to six years prior to a bankruptcy filing, reports the Dealbook blog of the New York Times.
A copy of the complaint is provided by the Scribd website.
Although Bernard Madoff is now serving a 150-year federal prison sentence for his role in the scheme, Ruth Madoff has never been accused of any criminal wrongdoing.
Related earlier coverage:
ABAJournal.com: “Madoff Reveals ‘Extraordinary Details’ of Scam to Plaintiffs Lawyers”
Raleigh News & Observer: “Behind bars in Butner, Madoff shares secrets of scam”