The trustee for Bernard Madoff’s estate, charged with returning as much money to Madoff’s victims as possible, is suing the Ponzi schemer’s wife Ruth for $45 million.
From the Times:
Irving H. Picard, the trustee who is trying to recover money for investors defrauded by Bernard L. Madoff, sued Mrs. Madoff on Wednesday for $44.8 million. Mr. Picard claimed Mrs. Madoff received tens of millions of dollars from her husband’s investment firm, enabling her to live a “life of splendor.”
Mrs. Madoff’s lawyer, Peter A. Chavkin, said he was baffled by the suit and noted that she had not been implicated in the fraud. The authorities allowed her to keep $2.5 million — a small fraction of the fortune that her husband amassed while orchestrating a vast Ponzi scheme.
But Mr. Picard, in his complaint, claimed that Mrs. Madoff had no “good faith basis” to believe she was entitled to the money she received over the years from Bernard L. Madoff Investment Securities. Three days before Mr. Madoff confessed last December that his celebrated investment firm was in fact a fraud, Mrs. Madoff transferred $11 million from the firm’s bank account to a real estate partnership in which she owned a stake, according to the complaint.
Picard is not charging as of yet that Ruth Madoff was in on the scheme, only that she wrongfully benefited from her husband’s theft of billions of dollars.
Money from her husband’s scheme went to pay for Ruth Madoff’s own business ventures and to her private expenses.
Reports the Times:
Mrs. Madoff received more than $3 million from the business over the last six years to pay personal expenses charged to her American Express card and $2 million in payments to a discount pet pharmacy Mrs. Madoff had invested in, PetCareRx.
Picard may also try to retrieve from Ruth Madoff the $2.5 million the court has allowed her to keep.
Madoff’s victims have been allowed to apply for the $500,000 reparations that the Securities Investor Protection Corporation pays to customers of failed brokerage firms. According to the Times, Madoff’s victims have made 15,400 claims to the SIPC, which may have to pay about $284 million.