When Ruth Madoff recently agreed to a deal with prosecutors under which she would retain millions, we expressed outrage and opined on the possibility of a civil “clawback” lawsuit. It has now happened. Court-appointed trustee Irving Picard accuses Madoff of a “life of Splendor” funded by illegally gained funds from her imprisoned husband Bernard Madoff. Ruth was last seen cringing on to a fur coat as she was being thrown out of a Manhattan $7 million penthouse when it was seized by agents.
Bankrupted investors are understandable put out to see Ruth living as a millionaire in the aftermath of the conviction of her husband. She can keep $2.5 million under the criminal settlement.
Picard filed this complaint to seek the funds as a civil matter — not barred under the criminal settlement. He argues that “[f]or decades, Mrs. Madoff lived a life of splendor using the money of BLMIS’s customers. 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.”
He adds some shocking figures from the last two years — during which the business was being investigated and then her husband prosecuted. Picard notes that Ruth personally made $23.7 million from the Ponzi-based business in the last two years and charged $1.1 million in personal expenses charged to her American Express card. He also claims that she spent 2.7 million in 2007 to pay for her yacht.
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This was not capitalism, it was fraud, and it was certainly not regulated, i.e. prosecuted as the crime(s) they are, even though the govt had been tipped off in detail that something smelled rotten.
The problem with the whole financial collapse is twofold:
1. The collapse was related to more subtle fraud, namely the credit certifying companies when they knowingly certified F- companies with AAA ratings. They should be liable for those ratings.
Whenever full disclosure of the risks of an investment is withheld or misrepresented to the investor, that was fraud.
2. The failure of govt regulators to enforce the existing laws on the books, and the permitting of fraud to continue w/o interference or sanction.
You don’t need more regulation, when the regulations that were already in effect were not used. The existing regulations would have very effectively curtailed these problems, if only they had be applied.
Fraud is not capitalism; loss of huge amounts due to fraud should not be an indictment of honest capitalism.
A final insult, the govt preemptively grabbing trillions from the American people, and giving it to mismanaged, bankrupt companies. Against public opinion and letters to Congress.
And then saying, hey we should all care, because its now all of our problems.
It wasn’t before our money was given away!
It was these zombie companies, who deserved to go into bankruptcy just any other defunct company.
Instead they get privileges no other company gets, and the American people foot the bill.
Sickening; bare ‘might makes right’ mentality, and politically corrupt influence.
lotta writes: GWLSM, and the unregulated ‘socialism’ for the big banks don’t seem to be working too well either
golly I don’t have answers. I used to think I did. I can barely ignite an idea. I just wish I could sell my house. I’m getting really tired of political theater. I dont even laugh at the Daily Show anymore.
GWLSM, and the unregulated ‘socialism’ for the big banks don’t seem to be working too well either.
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6733909.ece
rafflaw writes: hope the trustee is successful in making Mrs. M to fork over her ill gotten millions. There is no way in Hell that Mrs. M and the Boys did not know what was happening and where their millions were coming from.
of course they knew where the money came from and much of it came from not-for-profits that invested with Madoff. this means that money raised from volunteer efforts was used to elevate the whole Madoff machine.it bought their cars and their homes and that sad fur coat that Ruth Madoff clung to like it was one of her grandchildren.
lotta writes: ‘m not sure regarding Communism but I’m thinking it’s a darn fine argument for a justice department that works. Plea bargains and deals are a cop-out, the JD should just do its job properly.
of course the JD ought to do its job… and plea deals are a copout… but when people have the kind of spectacular chutzpah that Madoff and his wife haves displayed it just kinda makes me think that my old Commie grandfather had a point when he ranted about the haves and have nots.I don’t think that communism works but somehow un regulated capitalism isn’t making such a good name for itself either.
Dear Ruth,
The Government does like to be the sole one in control. They despise competition in any form or fashion.
Ruth, as the gun moll, still has access to the off-shore accounts that Markopolos talked about that were clues to mob participation.
I hope the trustee is successful in making Mrs. M to fork over her ill gotten millions. There is no way in Hell that Mrs. M and the Boys did not know what was happening and where their millions were coming from.
Justice delayed is justice denied. The problem with these white collar types is they all believe (know?) that it takes years for the juggernaut of justice to swing their way. They just have to look at someone like Bush playing fiddle on the corpses of a million plus dead and they’re emboldened.
GWLawSchoolMom “isn’t this just about the best argument for communism that exists?”
I’m not sure regarding Communism but I’m thinking it’s a darn fine argument for a justice department that works. Plea bargains and deals are a cop-out, the JD should just do its job properly.
isn’t this just about the best argument for communism that exists?
Given that Madoff in his first prison interview said that he was surprised the scheme lasted so long, it is not unreasonable to think that Mrs. Madoff was hiding whatever money possible to take care of herself and her family when the axe came down. I’ve
believed all along, though it’s just supposition, that Madoff made a deal to confess so that his family would not be prosecuted. I find it hard to believe that his two children worked for him and had no idea what was going on. I don’t care if they are criminally charged or not, but I don’t want them living our their lives with the ill gotten gains. Just as we now see 80’s financial thug metamorphosing into a philanthropist.
Dredd’s point is also well taken, we also need justice to come to those in the Fed and Wall Street for their various fraudulent schemes.
The sights turn toward the enablers. The plot thickens. When will the ponzi schemers within the Federal Reserve and Wall Street get the same treatment.