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Ruth Madoff Sued for $45 Million

July 29, 2009

Ponzi schemer Bernard Madoff’s wife Ruth found herself on the receiving end of a nearly $45 million lawsuit brought by the trustee appointed to liquidate her husband’s business.

Irving Picard, the trustee appointed by the Securities Investor Protection Corp., filed suit in New York to recover $44,822,355 in funds transferred from Bernard L. Madoff Investment Securities during the past six years either directly to his wife or to companies in which she was an investor. Picard detailed in his complaint 111 transactions in which he alleges there were fraudulent transfers or conveyances that he claims are recoverable under the Bankruptcy Code.  Let’s hope he can recover them.

U.S. Marshals evicted Mrs. Madoff from her $7 million Upper East Side penthouse apartment earlier this month and she has reportedly had trouble finding a building that will accept her as a resident, much less neighbors who care to have her next door. Before the eviction, she had signed a deal with federal authorities to surrender her property, including the penthouse and possessions such as a $39,000 Steinway piano and a $65,000 set of silverware.

Picard noted in his complaint, “For decades, Mrs. Madoff lived a life of splendor using the money of BLMIS’s customers.” Despite the eviction and her agreement with federal authorities, Picard maintains in his complaint that she still has lots of money at her disposal.

“While Madoff's crimes have left many investors impoverished and some charities decimated, Mrs. Madoff remains a person of substantial means,” he wrote. “The inequity between Mrs. Madoff's continuing financial advantages and the economic distress of Madoff's customers compels the trustee to bring this action.”

Her husband is now serving a 150-year jail sentence, and from the looks of things, the Madoff family has not seen its last day in court.

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