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Madoff lawyers: wife's apartment, US$62 mln unrelated to fraud

A New York apartment and US$62 million belonging to Ruth Madoff, the wife of accused swindler Bernard Madoff, are unrelated to the investment manager's purported fraud, her lawyer said yesterday.

A judge in US District Court in Manhattan partially lifted a freeze on assets of Madoff and his wife yesterday in the civil case so he can cooperate with a trustee winding down his firm to recover money for customers.

"While Madoff and his counsel do not object to the entry of the Relief Order ... they maintain that some of the assets covered by the Relief Order are unrelated to the alleged Madoff fraud and only Ruth Madoff has a beneficial ownership interest in these assets," said the order signed by Judge Louis Stanton.

It said these were her New York City apartment where Madoff is detained around the clock following his Dec. 11 arrest, about US$45 million in municipal bonds in an account held by Ruth Madoff at Cohmad Securities Corporation, and US$17 million in an account held by her at Wachovia Bank.

The Madoff's lawyer Ira Sorkin said "we stand by what is in the order" and declined further comment.

Madoff, a once-respected Wall Street trader and investment manager, was arrested and charged with fraud on Dec. 11 after authorities said he confessed to running a US$50 billion Ponzi scheme over many years. He is the only person charged in the purported scheme in which early investors are paid with the money of new clients.

A spokeswoman for the US Attorney's Office (USAO) in New York, which brought the criminal charge against Madoff, declined to comment yesterday's court order.

The order said the prosecutor asked that restraints be kept on Ruth Madoff's New York apartment, her home in Palm Beach, Florida and the Madoff's home in Montauk, New York "without prejudice to future application from the USAO for an order excluding from the restraints any actions taken by the prosecutor under the forfeiture with respect to the Madoff homes."

During the nearly three months since Madoff's arrest, authorities have said he had hundreds of millions of dollars in checks ready to mail out to family and associates.

On Feb. 11, a Massachusetts state regulator said Ruth Madoff withdrew more than US$15 million from an account at Cohmad Securities brokerage in the days before her husband's arrest.

Stanton signed an order freezing Madoff's assets in December, but revised it yesterday so that Madoff could "be partially relieved from the asset freeze to the extent necessary to permit Madoff to cooperate with the voluntary transfer of assets to the trustee."

New York lawyer Irving Picard is the court-appointed trustee trying to recover as much money and property as possible from Bernard L. Madoff Investment Securities LLC to pay bilked customers.

Picard said in February he had recovered US$946.4 million for customers. About 2,350 claims have been filed with the Securities Investor Protection Corp, a nonprofit established by Congress in 1970 to keep a reserve fund for the customers of failed brokerages.

The civil case is Securities and Exchange Commission v. Madoff et al 08-10791 US District Court for the Southern District of New York (Manhattan).


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