Madoff to lose all possessions, judge orders
The court has told the financier to forfeit $171 billion. Homes, cars, boats. Gone.
NEW YORK - Bernard L. Madoff would be stripped of all his possessions under a $171 billion forfeiture order handed down only days before prosecutors seek to put the disgraced financier in prison for the rest of his life.
U.S. District Judge Denny Chin entered the preliminary order Friday, ruling that Madoff must give up his interests in all property, including real estate, investments, cars, and boats.
The forfeiture represents the total amount that could be connected to Madoff's fraud, not the amount stolen or lost, and the order made clear that nothing prevents other departments or entities from seeking to recover additional funds.
A call to Madoff's attorney, Ira Sorkin, after-hours Friday was not immediately returned. In a court filing in March, Sorkin said the government's forfeiture demand of $177 billion was "grossly overstated - and misleading - even for a case of this magnitude."
Madoff, 71, pleaded guilty in March to charges that his exclusive investment-advisory business was actually a massive Ponzi scheme. Federal prosecutors say Madoff orchestrated perhaps the largest financial swindle in history.
Acting U.S. Attorney Lev Dassin, who released a copy of the order Friday night, plans to seek a 150-year prison term at Madoff's sentencing tomorrow. Sorkin has argued in court papers for a 12-year term.
According to Friday's order, the government also settled claims against Madoff's wife. Under the arrangement, the government obtained Ruth Madoff's interest in all property, including more than $80 million worth that she had claimed was hers, prosecutors said. The order left her $2.5 million in assets.
The agreements strip the Madoffs of all their interest in properties belonging to them, including homes in Manhattan; Montauk, N.Y.; and Palm Beach, Fla., worth a total of nearly $22 million. The Madoffs must also forfeit all insured or salable personal property contained in the homes.
Other seized assets include accounts at Cohmad Securities Corp., valued at almost $50 million, and at Wachovia Bank, valued at just over $13 million, and tens of millions of dollars in loans extended by Madoff to family, employees, and friends.
The judge's order also authorized the U.S. Marshals Service to sell the Manhattan co-op, properties in Montauk and Palm Beach, and certain cars and boats.
At the time of Madoff's arrest, fictitious account statements showed thousands of clients had $65 billion. But investigators say he never traded securities and instead used money from new investors to pay returns to existing clients.
Prosecutors said the total losses, which span decades, had not been calculated. But 1,341 accounts opened since December 1995 alone suffered losses of $13.2 billion, they said.
"The sheer scale of the fraud calls for severe punishment," the prosecutors wrote in response to the defense motion seeking lighter punishment.
Prosecutors said that federal sentencing guidelines allowed for the 150-year term and that any lesser sentence should still be long enough to send a forceful message and "assure that Madoff will remain in prison for life."
The government's papers include letters to Chin from victims of the scheme who are suffering hardships. Madoff "ruined lives," one letter said. "He deserves no mercy."