Ruth Madoff Off The Hook, Angry Investors Momentarily Distracted By Payouts

Since the Madoff story broke, his wife Ruth presumably hasn’t been able to go anywhere without groups of her friends quickly winding up hushed conversations and greeting her with big, fake smiles. Her florist and hair colourist wouldn’t take her business. She’s been harassed by paps when trying to buy some Jarslberg. Worst of all, everyone’s been casually linking her to the crimes, as it seems inconceivable that she couldn’t have known about them. Well, she’s now innocent in the eyes of the law, if not the eyes of angry Palm Beachers – the feds have decided there’s no evidence linking her to her husband’s crimes.

Things started to look up for Ruth a couple of weeks ago, when it emerged that a trust originally formed by her late parents was being “looked after” by Bernie; the feds realised that she wouldn’t put her own money into a fraudulent scheme. She’ll be still watching her back though – the WSJ notes: “the agreement didn’t preclude future criminal charges or lawsuits by the Securities and Exchange Commission or attorney Irving Picard, the trustee of the defunct Madoff firm who is recovering assets for investors”. No doubt some wronged investors will try and come after her last $2.5m. Plus there’s the slightly damaging fact that she shifted millions from one account to another, and had jewellery sent to relatives, just before the news broke.

Those who lost money to Madoff can take heart from the news that $231m has so far been freed up to pay them back – under U.S. law, each victim can receive up to $500,000 from the Securities Investor Protection Corporation. Of course, this falls rather short of the nearly $3bn-worth of complaints filed resulting from the fraud; an additional $2.7bn has been “authorized for potential future recovery”, but that’s only going to materialise if Madoff’s assets can be somehow discovered and mopped up.

We’ll have to wait and see if Madoff’s sons get off as lightly as their mother – they’ve had some actual lawsuits filed against them for a start, and were employees of their father. They did call the FBI though when their pops tearfully confessed that everything was a sham; depending on your love of conspiracy theories, you could surmise that Bernie orchestrated his demise thus so as to make his sons appear innocent. Or, y’know, they could just be innocent. Let’s let the Feds decide.

Posted by Ben Beaumont-Thomas in Hot Money | July 2, 2009 11:02AM |