Over $15M withdrawn as scheme unraveled

2/12/2009

BOSTON - The wife of disgraced money manager Bernard Madoff withdrew more than $15 million from a firm co-owned by her husband - including $10 million on the day their children turned over her husband to authorities for overseeing an alleged $50 billion Ponzi scheme, the top securities regulator in Massachusetts said yesterday.

Secretary of State William Galvin said Ruth Madoff, 67, withdrew $5.5 million on Nov. 25 and $10 million on Dec. 10 from Cohmad Securities Corp., a firm co-owned by her husband.

The secretary cited wire transfer records produced by Cohmad as proof of the withdrawals. They were made as Mr. Madoff's scheme was unraveling as investors filed $7 billion worth of redemption requests.

They also appeared to follow what authorities consider a disturbing trend on the part of the Madoffs to hide money that could be used to reimburse burned investors.

Prosecutors said investigators found 100 signed checks worth $173 million that Mr. Madoff was ready to send to his closest family and friends at the time of his arrest in December. Two weeks later, during the Christmas holidays, Mr. Madoff sent more than

$1 million in jewelry and heirlooms to family and friends.

"We're not accusing her of anything wrong," Galvin spokesman Brian McNiff said of Mrs. Madoff. "Now, what someone in New York or the feds may think of it may be entirely different."

A phone number listed to Ruth Madoff in Palm Beach, Fla., rang busy and a number in New York had been disconnected. A Cohmad spokesman in New York said the company had no comment. Ira Sorkin, a lawyer for Mr. Madoff, said he had no comment on the withdrawals.

In New York, meanwhile, the government and lawyers for Mr. Madoff agreed to a 30-day delay in yesterday's deadline for obtaining a grand jury indictment against the money manager.

The new deadline is March 13.

As he had during an extension a month ago, Assistant U.S. Attorney Marc Litt wrote that the government sought the extension "for the purpose of allowing time to conduct additional discussions regarding a possible disposition of this case."

It has been widely anticipated the case will be resolved before trial through an agreement between the government and Mr. Madoff's lawyers.

Since Mr. Madoff's arrest Dec. 11, investigators have assessed the financial damage inflicted on thousands of people who lost money investing with him.

Mr. Madoff was arrested after investigators said he confessed to his sons that he had swindled investors in a mammoth Ponzi scheme in which early investors are paid with money raised from new investors. The scheme collapses when there is no money to repay the last investors.

Mr. Madoff, a 70-year-old former Nasdaq stock market chairman, remains confined to his Manhattan penthouse under house arrest.