Sunday, June 28, 2009

Wall Street swindler Madoff to be stripped of riches

A federal judge in New York City has ordered disgraced financier Bernard Madoff to forfeit about $170 billion US, prosecutors said Friday.

On Monday, the same judge will sentence Madoff, who has pleaded guilty to fleecing hundreds of investors out of tens of billions of dollars in a massive Ponzi scheme.

At the time of Madoff's arrest late last year, fictitious account statements showed thousands of clients had investments worth $65 billion US. But investigators said he never traded securities, and instead used money from new investors to pay returns to existing clients.

The $170 billion is the amount prosecutors said flowed through the main account used to operate the scheme, not an actual amount of assets held. The government will probably only be able to recoup a fraction of it.

Prosecutors said the total losses, which span decades, haven't been calculated. But 1,341 accounts opened since December 1995 alone suffered losses of $13.2 billion, they said.

Prosecutors have asked that Madoff, 71, be handed a prison sentence of 150 years for masterminding the fraud.

Madoff has been in jail in New York since pleading guilty in March.

The forfeiture order announced Friday means U.S. marshals will be able to sell Madoff's apartment and primary residence in Manhattan, a house in Palm Beach, Fla., and a home in Montauk on New York's Long Island.

Other assets to be sold include luxury cars and boats, a home in Cap d'Antibes, France, artwork and jewelry.

Madoff and his wife, Ruth, will lose their interest in tens of millions of dollars in loans they made to family, employees and friends.

U.S. District Court Judge Denny Chin also signed an agreement Friday under which Ruth Madoff gave up her claim to more than $80 million in assets owned by the couple, keeping just $2.5 million in cash.