The master fraudster may have been sentenced to 150 years in prison this week. But victims of Bernard Madoff’s $65-billion Ponzi scheme are becoming increasingly impatient for prosecution of the corrupt financier’s family, friends, colleagues and advisers.
The subject of the greatest popular vitriol is Madoff’s wife, Ruth, who still lives in the couple’s $7-million penthouse on New York’s Upper East Side.
Although she has not been charged, she regularly visits her husband in jail and has refused repeatedly to express any public sympathy for his victims.
Ruth Madoff has been banned from her neighbourhood hair salon and a favourite Italian restaurant. United States officials have seized her seaside retreat in Palm Beach, Florida, and she is expected to lose the Manhattan penthouse. Earlier this year she was also forced to hand over a chateau on the French Riviera and several yachts that were registered in her name, as well as millions of dollars in cash and investments.
Trailed by tabloid photographers on the New York subway recently, she snapped: “Are you having fun embarrassing me and ruining my life?”
So far, Madoff has steadfastly refused to point the finger at anybody surrounding him. But few believe the 71-year-old financier could have spent two decades pulling off Wall Street’s biggest scam without cooperation from others in the offices of Madoff Securities on the 17th floor of Manhattan’s so-called Lipstick building.
Eleanor Squillari, Madoff’s former secretary, said recently she believed he was withholding information from the authorities to protect accomplices.
Jeff Zwerling, a New York lawyer representing Madoff clients, said: “It strains credulity to believe this man could have perpetrated this fraud single-handedly for so many years. The sheer volume of paperwork involved alone would render that practically impossible.”
Last week the US Securities and Exchange Commission filed civil charges of securities fraud against four individuals and a Madoff-linked investment advisory firm, Cohmad Securities. All are accused of recruiting clients to Madoff’s fund while “knowing or recklessly disregarding” facts indicating that Madoff was a crook.
Meanwhile, criminal charges are outstanding against David Friehling, owner of a one-man accountancy firm based in a roadside shopping centre in suburban New York which supposedly audited the books of Madoff’s global fund management empire. Britain’s Serious Fraud Office is investigating the London end of Madoff’s firm.
But to the frustration of those who lost money, a painstaking investigation into Madoff’s relatives has yet to yield much. The fraudster’s brother, Peter, who served as chief compliance officer at Madoff’s firm, has had most of his assets frozen by regulators. But he was given a living allowance of $10 000 a month after his lawyer complained he had insufficient cash to buy himself medicine, food or “even a cup of coffee”.
Madoff’s sons, Andrew and Peter, have dissociated themselves from their father despite holding senior roles at Madoff Securities. Neither is on speaking terms with Madoff. The younger of the two, Andrew, recently got into a street brawl in Manhattan with a former colleague who accused him of involvement in the fraud.
Fury towards Madoff and his family remains raw. At least two suicides have been linked to the scandal. Thierry de la Villehuchet, a French hedge fund manager, slit his wrists in December, leaving a note blaming Madoff-related losses. In a recent television interview Villehuchet’s wife accused the fraudster of “murder” over her husband’s death.
There is a lingering suspicion among many victims that Madoff has money stashed away somewhere. Bradley Simon, a New York lawyer specialising in white-collar crime, said: “They want him to spend the rest of his life in jail but they also want him to ‘fess up so they can get some of their money back.” —