Trustee sues schemer’s wife for $45m

Ruth Madoff faces lawsuit Ruth Madoff faces lawsuit
Globe Wire Services / July 30, 2009

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NEW YORK - The trustee liquidating Bernard Madoff’s business sued the imprisoned con man’s wife, Ruth, for $44.8 million, saying she was “massively enriched’’ by her husband’s $65 billion Ponzi scheme.

Trustee Irving Picard, assigned to wind down Bernard L. Madoff Investment Securities LLC, filed the lawsuit yesterday in US Bankruptcy Court in New York, claiming Ruth Madoff’s profit from the fraud over the past six years is recoverable under US bankruptcy law.

“For decades, Mrs. Madoff lived a life of splendor using the money of BLMIS’s customers,’’ Picard said in a complaint. “Millions of dollars belonging to BLMIS and its customers found their way into her personal bank accounts.’’

Authorities previously seized homes and property belonging to the Madoffs as part of the criminal case. Prosecutors agreed to allocate $2.5 million to Ruth Madoff and said Picard was free to go after the sum, the trustee said. Contents of the couple’s Manhattan apartment will be sold to repay victims.

Madoff, 71, pleaded guilty in March and was sentenced on June 29 to 150 years in prison for using money from new clients to pay earlier investors. Picard is suing Madoff’s biggest investors, including philanthropists and offshore hedge funds.

Ruth Madoff’s lawyer, Peter Chavkin, said yesterday in a statement the complaint is “perplexing and totally unjustified.’’

The complaint details 111 wire transfers from Bernard Madoff’s firm to Ruth Madoff’s personal bank accounts or to companies that the financier’s wife of 49 years invested in.

On Tuesday, a lawyer for Bernard Madoff’s victims said the financier told him during a 4 1/2-hour prison interview plenty of details about the fraud, including how it took place and how securities regulators missed catching him.

Joseph Cotchett said he planned to use what he learned to add defendants to a lawsuit on behalf of investors harmed by the scam.