SIPC TRUSTEE SUES RUTH MADOFF: SEEKS RECAPTURE OF $45 MILLION OF CUSTOMERS'
MONEY SHE RECEIVED FROM HUSBAND IN THE LAST SIX YEARS
NEW YORK CITY – July 29, 2009 — Irving L. Picard, the
Trustee appointed to liquidate the business of Bernard L. Madoff Investment
Securities LLC ("BLMIS"), filed suit today against Ruth Madoff, the
wife of Bernard L. Madoff, seeking to recapture at least $44,822,355 in funds
that were transferred from BLMIS during the past six years directly to Mrs.
Madoff or for her benefit to companies in which she was an investor.
In the Trustee’s complaint, filed in Bankruptcy Court in
Manhattan by the Trustee's law firm, Baker & Hostetler LLP, Mr. Picard
details 111 transactions which he alleges were fraudulent transfers or
conveyances recoverable under the Bankruptcy Code.
Noting that "for decades, Mrs. Madoff lived a
life of splendor using the money of BLMIS's customers," Mr. Picard states
in the complaint that "regardless of whether or not Mrs. Madoff knew of
the fraud her husband perpetrated" money she received from BLMIS
should be recovered "to the extent possible for the benefit of BLMIS and
its defrauded customers."
On June 26, 2009, when Bernard Madoff was sentenced
to a 150-year jail sentence, Madoff agreed to forfeit all of their assets to
the United States government, which, in turn, agreed not to contest Mrs.
Madoff's claim to $2.5 million. But that forfeiture expressly provides
that it "does not in any way preclude … Irving H. Picard, Esq. as
trustee for the liquidation of the business of defendant Bernard L. Madoff
Investment Securities LLC … from seeking to recover the Funds from Ruth Madoff."
In the complaint filed today, Mr. Picard states
that “while Madoff's crimes have left many investors impoverished and some
charities decimated, Mrs. Madoff remains a person of substantial means.
The inequity between Mrs. Madoff's continuing financial advantages and the
economic distress of Madoff's customers compels the Trustee to bring this