Madoff firm was family’s piggy bank

NEW YORK – The credit card bill is a 30-page study in conspicuous consumption.A quick scan shows a restaurant charge of more than US$2 800, US$2 000 in spending at a Parisian boutique and US$441 at a gourmet bagel shop. The total amount due: more than US$100 000.

Eye-popping numbers aside, the American Express statement from January 2008 has taken on broader meaning because of the notorious name on the corporate account: Bernard L. Madoff.
And the vast majority of the charges aren’t even his; they belong to his family and associates.
The bill is among a pile of exhibits filed recently in a Manhattan bankruptcy court by Irving Picard, the court-appointed trustee who is dissecting Madoff’s massive Ponzi scheme. Lawyers for the trustee claim in accompanying court papers that the credit card statement and other records prove Madoff’s family used his clients’ money to pay for homes, travel, fancy meals and other personal expenses.
The admitted swindler treated Bernard L. Madoff Investment Securities ‘as his personal bank account, taking funds when he needed them and transferring funds to other Madoff entities or family members when it suited his whim and purposes,’ the lawyers wrote.
Since the money was so intertwined, Picard has argued to a Manhattan bankruptcy judge that it would be more efficient and economical to consolidate separate efforts to identify and liquidate Madoff’s business and personal assets. A hearing is set for May 21.
The trustee has frozen Madoff’s bank accounts, sold off legitimate portions of his business and filed lawsuits to reclaim ill-gotten gains. The money will be used to pay claims brought by thousands of burned investors.
Madoff, 70, pleaded guilty in March to charges that his secretive investment advisory operation was a multibillion-dollar fraud. He could spend the rest of his life in prison.
In his plea, Madoff took all the blame for the scheme. He tried to create a wall between himself and his family, saying the separate trading operations run by his brother and two sons were ‘legitimate, profitable and successful in all respects.’
Federal investigators have said they don’t believe that, but won’t discuss how the investigation – now in its fifth month – is progressing. Lawyers for various family members and firm executives have denied any wrongdoing.
The trustee has stopped short of accusing anyone else of participating in perhaps the largest securities scheme in history. But in sometimes-scathing language and in the most detail to date, his lawyers claim Madoff insiders were blatant beneficiaries.
Madoff used his firms in Manhattan ‘to siphon funds which were, in reality, other people’s money, for his personal use and the benefit of his inner circle,’ the recent filing by trustee lawyers said. ‘Plain and simple, he stole it.’
They accuse the Madoff family of burning through hundreds of millions of dollars to cover their decadent lifestyle. Family members, the lawyers wrote, ‘used customer accounts as though they were their own.’
-Nampa-AP