Madoff Family Had $826 Million Net Worth, Filing Says
By David Glovin and Christopher Scinta
March 13 (Bloomberg) -- The family of Bernard Madoff, who pleaded guilty yesterday to masterminding the largest Ponzi scheme in history, claimed a net worth of $826 million as of December 31, according to a court filing.
As part of a request to free Madoff from prison before he is sentenced in June, Madoff’s lawyers today filed court documents with the U.S. Court of Appeals in Manhattan. Included was Madoff’s financial statement, which he filed in a civil lawsuit brought by the Securities and Exchange Commission. The document had been filed in that case confidentially.
“Net worth (assets minus liabilities) $823 to $826 million,” the document says. Of the $826 million in net worth, Madoff said that $700 million was the net value of his ownership in Bernard L. Madoff Investment Securities LLC. The document says the Madoffs’ liabilities were $265,000.
Madoff’s brokerage, which is being sold to pay victims of his scheme, may fetch no more than $10 million, according to Larry Tabb, founder of TABB Group, a financial-market research and advisory firm. The brokerage, which is being marketed to potential bidders, had earnings of just $1.12 million last year, according to documents drawn up by investment bank Lazard Ltd.
Other than the value of Madoff’s business, the largest assets claimed by the Madoff family are $17 million in cash and $45 million in securities. Last week, U.S. District Judge Louis Stanton, who is presiding over the lawsuit against Madoff by the SEC, said the money manager’s lawyers claimed that his wife, Ruth, alone owns $17 million in cash and $45 million in municipal bonds. Ruth Madoff also claims ownership to a Manhattan apartment that the filing says is worth $7 million.
The attorneys said Ruth Madoff claimed those assets are “unrelated” to the alleged multibillion dollar Ponzi scheme orchestrated by her husband, Stanton said.
Ponzi Scheme
The document was filed a day after Madoff, 70, pleaded guilty to defrauding investors of as much as $65 billion in the largest-ever Ponzi scheme. His attorneys filed a request with the appeals court that Madoff be freed from prison until he is sentenced on June 16. Madoff faces 150 years behind bars for using money from new investors to pay off old ones in a scheme that ran from at least the early 1990s.
“I operated a Ponzi scheme through the investment advisory side of my business,” Madoff told U.S. District Judge Denny Chin at yesterday’s hearing in a courtroom packed with victims and members of the media. Speaking publicly for the first time since his arrest on Dec. 11, he said he was “deeply sorry” and knew what he did was criminal.
Dan Horwitz, a lawyer for Madoff, didn’t immediately return a call.
Cash, Securities
Madoff and his wife had $17.03 million in cash, the document says. Between $4 million and $7 million was owed to Ruth Madoff from their sons, the document says. The Madoffs had $45 million in securities, in addition to Madoff’s interest in his market-making and money-management businesses, valued at $700 million, the document says.
The couple valued their East 64th Street apartment in Manhattan at $7 million, their house in Montauk at $3 million, their home in Palm Beach, Florida, at $11 million, and their residence in Cap d’Antibe, France, at $1 million. The furnishings for the homes are worth $9.9 million, according to court papers.
The Madoffs also had $2.6 million in jewelry and a 50 percent share in an airplane valued at $12 million, according to the court document.
Four Boats
The family has four boats, according to the filing. Ruth Madoff owns a 2006 Leopard yacht named “Bull” in France, which is worth $7 million; a vessel named “Sitting Bull” in Montauk, worth $320,000; and a boat named “Little Bull” in Florida, worth $25,000. The Madoffs also own a Rybovich fishing boat moored in Palm Beach valued at $2.2 million.
The Madoffs put their total liabilities at $265,000, including $100,000 in credit card debt, $151,000 in accrued real estate taxes, and $10,000 owed on a car lease.
The Madoff’s expenses totaled $346,758 a month, largely for maintaining and insuring their homes and boats, the document says. Their expenses also include $100,000 in monthly legal fees and $140,000 for personal security each month, according to the court filing.
Peter Chavkin, a lawyer for Ruth Madoff, and Mauro Wolfe, a lawyer for Bernard Madoff, declined to comment.
It’s unclear if investigators will pursue the Madoff family assets. Kevin McCue, a spokesman for Irving Picard, the trustee liquidating Madoff Securities, didn’t immediately respond to a phone call or e-mail seeking comment. Prosecutors have said that as much as $170 billion that flowed through Madoff Securities since the start of the fraud may be subject to seizure.
The case is U.S. v. Madoff, 09-cr-00213, U.S. District Court for the Southern District of New York (Manhattan).
To contact the reporters on this story: David Glovin in New York federal court at dglovin@bloomberg.net.
Last Updated: March 13, 2009 18:30 EDT |
