Bonnie and Clyde Without the Guns

Feb. 11 (Bloomberg) — Bernard Madoff’s wife withdrew $15.5 million from a brokerage account at a firm co-owned by her husband late last year, including $10 million on the eve of his arrest, Massachusetts securities regulators said.

Original movie poster

Ruth Madoff, 67, removed $5.5 million on Nov. 25 and the rest on Dec. 10 from New York-based Cohmad Securities Corp., according to a complaint filed today by Secretary of the Commonwealth William Galvin. Bernard Madoff was arrested Dec. 11 for allegedly operating a $50 billion Ponzi scheme.

Galvin, the state’s top securities regulator, said evidence of the withdrawals supports his claim that Cohmad and Bernard L. Madoff Investment Securities LLC are “so intertwined that they could be viewed as a common enterprise.” He is seeking to revoke Cohmad’s state securities registration for failing to fully cooperate with his investigation about its relationship with Madoff.


While Ruth Madoff hasn’t been charged in the case, a person familiar with the investigation told Bloomberg News in December that U.S. regulators were trying to determine whether she maintained secret records related to the alleged scheme.

Bernard Madoff, 70, was arrested in New York after allegedly confessing that he and his firm used new money to pay old investors in a Ponzi scheme. He was released the same day he was arrested on a $10 million bond guaranteed by his wife and secured by his Manhattan apartment.

Ruth Madoff agreed to forfeit homes in Montauk, New York, and Palm Beach, Florida, if her husband flees. He faces as much as 20 years in prison if convicted of securities fraud.


The Madoffs were required in December to furnish a complete list of assets they held in a confidential tally to the U.S. Securities and Exchange Commission. John Heine, a spokesman for the SEC, declined to comment on whether the withdrawn money was on the list of assets.

Irving Picard, the trustee liquidating Madoff’s firm, has recovered about $946.4 million in cash and securities for customers of the bankrupt firm.


Government prosecutors tried to have Madoff jailed in January for violating a court-ordered asset freeze by attempting to dispose of $1 million in valuables.

Madoff mailed $1 million in watches and jewelry, including Tiffany and Cartier watches and a diamond necklace, to relatives in December. A federal court judge in Manhattan allowed Madoff to remain under house arrest in his Upper East Side apartment.


Richard Schulman, a business litigator at New York law firm Bryan Cave LLP, said the Madoffs likely won’t face any sanctions related to the withdrawals as long as the money was disclosed to the SEC.

If not, and if the money is traceable to her husband or his firm, Ruth Madoff could face prosecution for “aiding and abetting a crime” in trying to protect assets from seizure, he said. Schulman doesn’t represent any Madoff victims.

Walter Pagano, head of litigation consulting and forensic accounting services at accounting firm Eisner LLP in New York, said investigators will want to know if Ruth Madoff had any knowledge of fraud organized by her husband when she made the withdrawals. The second withdrawal occurred the same day Madoff allegedly informed his sons about the Ponzi scheme.


Cohmad is named in Galvin’s complaint as a “feeder fund” to Madoff’s investment firm. Cohmad earned more than $67 million over eight years sending investors’ money to Madoff, the complaint said. Galvin called the two firms “deeply intertwined.”


Madoff Investments made monthly payments to Cohmad over eight years “that appear to add up to $67 million,” the complaint said. The payments made up more than 84 percent of Cohmad’s total income, the complaint said.

From CBS News:

This is not the first move by Ruth Madoff that has raised eyebrows. A CBS News investigation that aired on Jan. 30 discovered Bernard Madoff’s wife also took steps, before her husband’s arrest, to protected their $9.5 million Palm Beach, Florida home from being taken away in a bankruptcy proceeding. A unique Florida “homestead” law allows some homes to be shielded from creditors. Property records, obtained exclusively by CBS News show Ruth tried to get “homestead” status in 2006 at the same time federal authorities were probing Bernard Madoff. Her initial application in 2006 was rejected. She then reapplied on September 18, 2008, less than two months before federal authorities detained her husband.


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20 responses to “Bonnie and Clyde Without the Guns

  1. That Florida “Homestead” law is one of the many reasons why a lot of well-off shady characters end up in Florida; they can live in luxury and keep a major asset even if they are technically flat broke.

  2. That homestead law is what attracts the likes of murderer O.J. Simpson to Florida.
    As for the old Madoff broad, the question is, what did she do with the millions she withdrew?
    As a recent, former employee of a firm that was perpetrating a similar Ponzi scheme (of much smaller dimensions)I am eager to see how this case ends.

  3. we get all kinds of nasty characters down here because of the homestead law. while the law is a good one for those people who are forced to declare bankruptcy, there should be a ceiling on the value of the property. there should also be no protection for those who have committed felonies. until that changes, we’ll keep getting the dirtbags from enron and scumbags like o.j. moving here.

  4. Karen and Nonnie, I was thinking of O.J. when I typed my comment, but decided against mentioning him specifically. Just the same, thanks for bringing him up; he’s a perfect example. As for “The Smartest People in the Room” from Enron, I had no idea they took advantage of it, too. It figures they would.

    I’m surprised there aren’t more comments about this poster. I’m beginning to wonder if there is anything really funny about Madoff, as mockable as he is.

  5. neon vincent,
    this is from the library of congress’s website:

    Marvin Warner, a former ambassador to Switzerland and the owner of a failed Ohio Savings & Loan, who paid off only a fraction of $300 million in bankruptcy claims while keeping his multi-million-dollar horse ranch near Ocala, Florida.

    Martin A. Siegel, a former Wall Street investment banker convicted of insider trading. While facing a $2.75 billion civil suit, he bought a $3.25 million, 7,000-square-foot beachfront home in Ponte Vedra Beach.

    former baseball commissioner Bowie Kuhn, whose Manhattan law firm went into bankruptcy. After creditors seized his weekend house in the Hamptons and were about to attach his $1.2 million home in Ridgewood, New Jersey, Kuhn acquired a million-dollar house in Florida with five bedrooms and five baths.

    Dr. Carlos Garcia-Rivera, a Miami physician with no malpractice insurance, who was named in four separate malpractice actions, filed for bankruptcy protection, and kept a $500,000 home with a 100-foot swimming pool.

    there are a few more. bill delahunt introduced a bill to close the loopholes in the bill so that people can’t get away with this, but, of course, it didn’t pass.

  6. Bowie Kuhn? I had no idea!

  7. omg!!! 😯 you actually learned something here, neon vincent?


  8. 🙂

    Hey, without you, I’d have never known why Barbara Bush is called Pickles.

  9. neon vincent,
    laura is pickles, not barbara. bar is known as….well, i won’t go into the names people have called that miserable excuse for a human being! 😉

  10. jeb

    Bonnie and Clyde had a degree of respectability that these two scumbags will never attain.

  11. jeb,
    at least bonnie and clyde were honest. they put guns in people’s faces, so the people knew they were being robbed. the madoffs were cowardly about it. i hope they lose everything. a lot of their victims did.

  12. you know this goes even deeper – how the hell is he not in jail

  13. jeb

    What I want to know is how one withdraws $15 mil. Granted she broke it into two transactions but was she going through the lobby with a wheelbarrow? Did she have to stop by the thrift store before she picked up the money to drop off all the clothes accumulating in her trunk that she’d been meaning to drop off for a long time?

    I think everyone is being to hard on her. Just imagine what your day would be like if you had a to do list that including schlepping millions out of the brokerage house and into the car. On top of that, she probably had to go home and order the maid to make dinner. Personally I’d have just called out for Chinese delivery or something.

  14. dcAp,
    the laws are different for rich people, even if they got rich by stealing from everyone else. i’m sure there are a few people from the d.a.’s office and at least a couple of judges who have been to his home for dinner quite a few times.

  15. oh, jeb, now i feel terribly guilty. poor ruthie! she must be exhausted.

  16. nightowl724

    I feel sorry for MM Madoff. Both of them Really, I do.


    nonnie, your ability to find just the right cover time after time… Well, you could take it to the bank!

  17. nightowl,
    they should be subjected to a never-ending film loop of the people whose lives they ruined. they must divorce themselves from whatever little humanity they have and forget that they are dealing with real people with real families just like they have. it’s not just numbers on a piece of paper. they are ruining real lives.

  18. nightowl724

    Hon, I just don’t think they would care. Psychopaths never do…

  19. i don’t think they’re psychopaths. that’s what’s really sad. if it was a matter of some kind of mental disease, i would feel sorry for them a little. instead, they probably got caught up in a lifestyle and a mindset where enough was never enough. because they are not insane, what they did is unforgivable.

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