Trustee sues Madoff's wife for nearly $45M
NEW YORK -- The wife of convicted Ponzi scheme architect Bernard Madoff benefited from a decades-long "life of splendor" and should be ordered to repay nearly $45 million, the trustee pursuing the disgraced financier's assets for victimized investors charged Wednesday.
Making good on earlier signals he would seek money from Madoff's family, trustee Irving Picard filed a lawsuit that argued Ruth Madoff should turn over the funds "regardless of whether or not" she "knew of the fraud her husband perpetrated."
Whiled the money manager's crimes "have left many investors impoverished and some charities decimated, Mrs. Madoff remains a person of substantial means," Picard argued in the federal Bankruptcy Court filing. "The inequity between Mrs. Madoff's continuing financial advantages and the economic distress of Madoff's customers compels the trustee to bring this action."
Peter Chavkin, a lawyer representing Ruth Madoff, said in a statement the action "is wrong as a matter of law and fairness" because his client has already forfeited nearly all the assets sought by Picard.
Chavkin noted that federal prosecutors concluded Madoff's wife was entitled to keep $2.5 million in property because it could not be traced to the scam. However, U.S. District Judge Denny Chin ruled that a court trustee or other legal claimants could still seek those assets.
Madoff scam victims, many of whom are coping with financial ruin, hailed what they characterized as a belated effort to seek recovery from Ruth Madoff.
"I'm very happy to hear about this. Maybe it's the beginning of some additional justice," said Ronnie Sue Ambrosino, who coordinates a support group for fellow Madoff victims.
Federal law authorizes court trustees to seek recovery of assets withdrawn from a company for up to six years before a bankruptcy filing. Madoff's firm went into bankruptcy in December, after his arrest by the FBI. He pleaded guilty in March to using money from new investors to pay earlier ones, and last month was sentenced to 150 years in prison.
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