Wall Street Journal Seeks Out David Siegal's Thoughts on Madoff Prosecution

06/30/2009

Madoff's Wife Cedes Asset Claim
Wall Street Journal

Ruth Madoff, the wife of one of the most reviled swindlers in history, has agreed to give up her potential claim to more than $80 million worth of assets, keeping just $2.5 million in cash in an agreement reached with federal prosecutors.

The settlement involving Mrs. Madoff was finalized alongside a court order of forfeiture against Mr. Madoff in the amount of $170 billion, which represents the amount of money that prosecutors say flowed into his investment firm.

According to court documents released on Friday, Mrs. Madoff consented to the sale of her properties in Palm Beach, Fla., Montauk and Manhattan, as well as boats and vehicles, in order to preserve value for victims. Earlier this year Mr. Madoff asked prosecutors to allow his wife to keep about $70 million in assets held in her name, which he argued weren't connected to his fraud.

Mr. Chavkin said she "unequivocally did not know of the misconduct and did not participate in it."

If family members who worked at the firm helped him carry out or conceal his fraud, his posture since the arrest has made life more difficult for prosecutors scrutinizing them, lawyers uninvolved in the criminal case surmise.

Their defense would be "Bernie lied to us, too," says David Siegal, a former federal prosecutor who is now a defense lawyer in New York. "If the government had direct testimony to the contrary from an insider who was central to the fraud scheme, it's likely we would have seen charges by now."

Mr. Siegal cautioned, however, that taking more than six months to build a white-collar criminal prosecution "wouldn't be unusual." Indeed, while there have been several people charged in another recent alleged Ponzi scheme, regarding Stanford Financial Group, federal authorities have been investigating operations there since at least June 2008.

This article excerpted from the Wall Street Journal.  For full text, click here.  (Subscription may be required.) 



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