Madoff Investment Scandal - Recovery of Funds

Recovery of Funds

Madoff's combined assets are about $826 million and have been frozen. Madoff provided a confidential list of his and his firm's assets to the SEC on December 31, which was subsequently disclosed on March 13, 2009 in a court filing. Madoff had no IRAs, no 401(k), no Keogh plan, no other pension plan and no annuities. He owned less than a combined $200,000 in securities in Lehman Brothers, Morgan Stanley, Fidelity, Bear Stearns, and M&T. No offshore or Swiss Bank accounts were listed.

On March 17, 2009, a prosecutor filed a document listing more assets including $2.6 million in jewelry and about 35 sets of watches and cufflinks, more than $30 million in loans owed to the couple by their sons, and Ruth Madoff's interest in real estate funds sponsored by Sterling Equities, whose partners include Fred Wilpon. Ruth Madoff, and Peter Madoff, invested as “passive limited partners” in real estate funds sponsored by the company, as well as other venture investments. Assets also include the Madoffs' interest in Hoboken Radiology LLC. in Hoboken, New Jersey; Delivery Concepts LLC, an online food ordering service in midtown Manhattan that operates as "delivery.com"; an interest in Madoff La Brea LLC; an interest in the restaurant, PJ Clarke’s on the Hudson LLC; and Boca Raton, Florida-based Viager II LLC.

On March 2, 2009, Judge Louis Stanton modified an existing freeze order to surrender assets Madoff owns: his securities firm, real estate, artwork, and entertainment tickets, and granted a request by prosecutors that the existing freeze remain in place for the Manhattan apartment, and vacation homes in Montauk, New York, and Palm Beach, Florida. He has also agreed to surrender his interest in Primex Holdings LLC, a joint venture between Madoff Securities and several large brokerages, designed to replicate the auction process on the New York Stock Exchange. Madoff's April 14, 2009 opening day New York Mets tickets were sold for $7,500 on ebay.

On April 13, 2009, a Connecticut judge dissolved the temporary asset freeze from March 30, 2009, and issued an order for Fairfield Greenwich Group executive Walter Noel to post property pledges of $10 million against his Greenwich home and $2 million against Jeffrey Tucker's. Noel agreed to the attachment on his house "with no findings, including no finding of liability or wrongdoing". Andres Piedrahita's assets continue to remain temporarily frozen because he was never served with the complaint. The principals are all involved in a lawsuit filed by the town of Fairfield, Connecticut, pension funds, which lost $42 million. The pension fund case is Retirement Program for Employees of the Town of Fairfield v. Madoff, FBT-CV-09-5023735-S, Superior Court of Connecticut (Bridgeport). Maxam Capital and other firms that allegedly fed Madoff's fund, which could allow Fairfield to recover up to $75 million were also part of the dissolution and terms.

Professor John Coffee, of Columbia University Law School, said that much of Madoff's money may be in offshore funds. The SEC believed keeping the assets secret would prevent them from being seized by foreign regulators and foreign creditors.

The Montreal Gazette reported on January 12, 2010 that there are unrecovered Madoff assets in Canada.

In December 2010, Barbara Picower and others reached an agreement with Irving Picard to return 7.2 billion dollars from the estate of her deceased husband Jeffrey Picower to other investors in the fraud.

In connection with the victim compensation process, on December 14 and 17, 2012, the Government filed motions requesting that the Court find restitution to be impracticable, thereby permitting the Government to distribute to victims the more than $2.35 billion forfeited to date as part of its investigation through the remission process, in accordance with Department of Justice regulations. Richard C. Breeden was retained to serve as Special Master on behalf of the Department of Justice to administer the process of compensating the victims through the Madoff Victim Fund.