Irving L. Picard, the trustee appointed to liquidate the business of Bernard L. Madoff Investment Securities LLC, (BLMIS) filed a lawsuit yesterday against Ruth Madoff, wife of Bernard Madoff, who was convicted of securities fraud and sentenced to 150- years in prison last month. Picard is seeing to recover $44.8 million in funds that were transferred from BLMIS during the past six years directly to Ruth Madoff or for her benefit to companies in which she was an investor.
In the trustee's complain, filed in a Manhattan bankruptcy court by Picard's law firm, Baker & Hostetler LLP, Picard details 111 transactions, which he alleges were fraudulent transfers or conveyances recoverable under the bankruptcy code.
"For decades, Mrs. Madoff lived a life of splendor using the money of BLMIS's customers," stated Picard in the release summarizing the complaint. Picard argued in the complaint that "regardless of whether or not Mrs. Madoff knew of the fraud her husband perpetrated,' money she received from BLMIS should be recovered "to the extent possible for the benefit of BLMIS and its defrauded customers."
On June 26, 2009, when Bernard Madoff was sentenced to a 150-year jail term, Ruth Madoff agreed to forfeit all of their assets to the U.S. government, which in turn agreed not to contest Mrs. Madoff's claim to $2.5 million. But according to the compliant, that forfeiture "does not in any way preclude Picard.as trustee for the liquidation of the business of defendant Bernard L. Madoff Investment Securities LLCfrom seeking to recover the funds from Ruth Madoff."
In the complaint filed yesterday, Picard stated that "While Madoff's crimes have left many investors impoverished and some charities decimated, Mrs. Madoff remains a person of substantial means. The complaint focuses on "the inequity between Mrs. Madoff's continuing financial advantages and the economic distress of Madoff's customers (which) compels the trustee to bring this action."
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