My law enforcement sources have watched closely the coverage of Ruth Madoff ‘s statement today, which her legal team issued after her husband Bernard Madoff was sentenced to 150 years in prison for running a $65 bn Ponzi scheme.
What strikes them as most telling now is not what she said, but what she didn’t say. And her actions as well.
Madoff has told authorities that he acted alone. But US prosecutors and law enforcement are investigating his family, including his wife of about 40 years. As part of his sentencing, Ruth has agreed to keep $2.5 mn of her claim of more than $80 mn in assets. Ruth still may also be sued by investors.
Ruth was also allegedly doing accounting for her husband in his offices, and allegedly may have overseen commingling of customer funds with personal accounts, an eyebrow-raising report reveals (see below).
“I am breaking my silence now because my reluctance to speak has been interpreted as indifference or lack of sympathy for the victims of my husband Bernie’s crime, which is exactly the opposite of the truth,” Ruth Madoff said in the statement.
“From the moment I learned from my husband that he had committed an enormous fraud, I have had two thoughts -- first, that so many people who trusted him would be ruined financially and emotionally, and second, that my life with the man I have known for over 50 years was over,” she said in the statement.
Ruth withdrew more than $15.5 mn from a brokerage account on which she was co-owner along with her husband, in the weeks prior to his arrest. Other reports indicate her epic swindler of a husband made the withdrawals. Regardless of who made the withdrawals or the trades, she enjoyed the benefits of this transaction, law enforcement sources say.
Specifically, $5.5 mn was withdrawn on November 25, 2008, and two weeks later another $10 mn on December 10, 2008, from their brokerage account at Cohmad Securities. Cohmad was a feeder fund which had an office in Madoff’s headquarters and was part-owned by him.
Also in November, another $2 mn was withdrawn from her husband's London office, Madoff Securities International Ltd. Also, Ruth Madoff owned interests in real estate funds sponsored by Sterling Equities. Furthermore, Ruth and Bernard’s brother Peter Madoff, invested as “passive limited partners” in real estate funds sponsored by the company, as well as other venture investments.
Here’s a top law enforcement official’s take on it:
“Her statement was emotional, it basically talks about emotion and betrayal."
"It tellingly addresses nothing about her knowledge of his business. It avoids all such discussion."
"Law enforcement could not compel Ruth to testify, due to spousal protection laws."
"And to this day, neither Ruth Madoff, nor the sons, have volunteered to testify."
"Nor are they cooperating with law enforcement."
"That’s telling.”
“So we would say this to Ruth: If you believe that your husband, as you said in your statement today, lied to you, then why are you not sitting down with law enforcement immediately if you truly believe he lied to you?"
"Why are you not helping us get investors’ money back?”
“Why aren’t you driving down with your attorney to say, I will do whatever I will have to? And why aren’t your sons?”
“They are not cooperating with law enforcement, if they are truly sorry and if they were duped, you would think they would be running to law enforcement to help.”
“But to this day they have shown they are not willing to help.”
“So ask yourself, what is the Madoff family doing now, knowing Bernard is evil? How are they responding?"
“Today, Ruth says she does know about her husband. But what is she doing, what has she done since?"
"She’s done nothing to help to law enforcement and to volunteer her services, she has not even said anything to help find the assets, at minimum she has not said she would do everything in her power to help.”
Her silence speaks volumes.
Lucinda Franks, a New York Times and Pulitzer Prize-winning journalist, reports for The Daily Beast that key investigators now believe Ruth Madoff played a larger role than previously assumed in her husband’s Ponzi scheme, and that the fraud began far earlier than other reports have indicated. Plus, Franks reports, "20 million Madoff documents have been unearthed in a Queens warehouse."
Franks reveals that there was commingling of funds going on at the Madoff operation, funds from the investment advisory business were comingled with Madoff's personal funds and with a market-making fund in which Madoff executed orders for customers as a broker-dealer.
Franks reports that Ruth Madoff, whose father was an accountant, Saul Alpern, oversaw the bookeeping for these three accounts, Franks reports.
The commingling of funds is a violation of regulatory rules that require all customer funds to be segregated from those of the broker-dealer, Franks says. Apparently it was this comingling of funds that enabled the Bernie Madoff scandal to continue for so long, Franks reports.
Franks quotes one highly placed person involved in the inquiries: “If Ruth Madoff had an office there for 37 years and kept the books of this account, wouldn’t she have had some inkling that something was wrong? She’s there all the time and her husband just blows it by her? They are a really tight couple, did he really keep this secret from her every day of their marriage?”
I cannot imagine a bookkeeper not knowing something fishy is going on after a week and having proof of fraud on hand on making year's balance at the latest.
Ruth Madoff was wife and bookkeeper of largest ponzi swine in history. She is guilty or hell freezes over if otherwise. Any person knowing anything about accounting will agree. There is no way of keeping track of all transactions and not knowing them as fraud. No way. Or accountancy is for freaks.
July 1, 2009 at 2:06 pm
Mike
The absolute worst thing you can do when you or a family member is under investigation is cooperate. The authorities absolutely have no vested interest in helping you, they do have a interest in prosecuting as many people as possible. The best policy is to shut up and let them do their job, which I am sure is what Mrs Madoffs lawyers told her to do.
Why do you think that everyone who testifies before congress needs a lawyer, speaking out is more likely to put you in jail than to keep you out. There are exceptions, such as those going down anyway and turning on another to save their own skin. That is one of the rare times when cooperating with investigators would be a net plus.
June 30, 2009 at 11:45 am
Carla, Ballwin, MO
Under those circumstances, if he truly loved her, he shouldn't have involved her in the biz! Her punishment - living on $2.5 million!!!
June 30, 2009 at 11:13 am
Silver Surfer
The statement from Ruth Madoff's mouthpiece stinks under ice! How is it humanly possible not to know something was suspicious after 40 years? She's being dishonest about this, and so are the rest of the family. While it is possible all of Madoff's family suffers from delusional episodes, it is exceptionally unlikely that all of them could suffer this degree of mental disorder at the same time for that long a period. Somebody is lying, and she a prime suspect. Seize all of their accounts, filter through them with an extra fine toothed comb, and prosecute the guilty. Strip all of them of their ill gotten gains and serve them up to the mercy of their victims. Justice is served.
June 30, 2009 at 12:08 am
Equisse
Ruth, you want to redeem yourself? Take a lie detector test. If you pass, you can keep your designer clothes and spend the rest of your life helping to recover the money Bernie didn't spend on your free-wheeling lifestyle. If you fail, you auction your clothes, give the money to the people who paid for them, and you go to jail and learn to scrub toilets with a toothbrush. The same offer is available to your sons who I personally think are as guilty as you and your husband.
June 29, 2009 at 10:24 pm
Paul
Ruth, you want to redeem yourself? Take a lie detector test and make the results public. If you pass, you can keep your clothes and spend the rest of your life helping the authorities to find the money and assets Bernie tucked away for emergencies. If you fail, you can go to prison and donate your designer clothes to the people mentioned previously, as well as help the authorities find the missing money and assets. The same offer is available to your sons who seem to be conveniently hiding from the people who supported the lavish lifestyle of the entire Madoff family. Personally, I think you and your sons deserve to be stripped of everything... just as your family has done to others.
June 29, 2009 at 10:11 pm
jmf_stl
Madoff sentenced and out of the way, the greedy bastard. Now if we can get Barney Frank, Chris Dodd, Jamie Gorelick, and the rest of the real creators of the economies downfall maybe we will have something.
But that won't happen.
June 29, 2009 at 6:34 pm
bootyboot
she had to know what is up, "nothing gets past Ruth" is what Madoff even said about her. She is just as guilty and you know that silence means she knows more than she is implying.
June 29, 2009 at 6:17 pm
j lynn
Would'nt it be funny if Ruth lost her investment? I think she should be left penniless and have to go get a job at walmart.
June 29, 2009 at 5:42 pm
Steve
This is insane. The judge acted improperly and will be appealed successfully for a shorter term. Justice does not need emotion to be fulfilled. Why are we allowing this country to be governed and its laws enforced without common sense. This will wind up be 30 years but it will still be a life sentence for the sunset of his life.
Why should Ruth cooperate? If she doesn't know anything, why should she waste her time and spend what money she has left on attorney fees? The bigger question is what have the FEDs managed to find out on their own? It doesn't seem like they (FEDs) have discovered much on their own. Why are prosecutors counting on cooperation and not doing the forensic accounting necessary to find guilty parties and recover money?
June 29, 2009 at 5:03 pm
Bob in Ky
Poor Ruth! Left with ONLY $2.5 Million! She must be really worried about how she will live from now on!
I read today in another article that if that money is invested, she will only have about $125,000 a year to live on! What a bummer!
Given the facts & circumstances, and, as per this story, what she is NOT saying, that she very probably knew MUCH more th an she's telling anyone.
I hope that enough money is garnered from the forfeited assetts to completely reimburse all those who lost their life's savings, & are wondering how they're goint to make house payments, afford medical care, etc, etc.
That guy is pure evil, & I don't think any of his family members are much better. I sure hope the Feds get to the bottom of this mess!
June 29, 2009 at 4:58 pm
Rex Burgess
Wow,
I'm actually shocked because I started to believe her. I don't care what people say; the best thing that could've happened to this country is freedom of the press. Yes, it's been abused, yes it's been used, but for true reporters telling it like it is, it's invaluable. Thank you for the other side of this rotten coin.
June 29, 2009 at 4:56 pm
Ken
You don't have that much money and not even question where it comes from. Maybe the wife, but certainly not the well financially educated sons
Ruth withdrew more than $15.5 mn from a brokerage account on which she was co-owner along with her husband, in the weeks prior to his arrest. Other reports indicate her epic swindler of a husband made the withdrawals. Regardless of who made the withdrawals or the trades, she enjoyed the benefits of this transaction, law enforcement sources say.
truly believe he lied to you?"
Franks reveals that there was commingling of funds going on at the Madoff operation, funds from the investment advisory business were comingled with Madoff's personal funds and with a market-making fund in which Madoff executed orders for customers as a broker-dealer.
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zezowaty Zorro
I cannot imagine a bookkeeper not knowing something fishy is going on after a week and having proof of fraud on hand on making year's balance at the latest. Ruth Madoff was wife and bookkeeper of largest ponzi swine in history. She is guilty or hell freezes over if otherwise. Any person knowing anything about accounting will agree. There is no way of keeping track of all transactions and not knowing them as fraud. No way. Or accountancy is for freaks.
Mike
The absolute worst thing you can do when you or a family member is under investigation is cooperate. The authorities absolutely have no vested interest in helping you, they do have a interest in prosecuting as many people as possible. The best policy is to shut up and let them do their job, which I am sure is what Mrs Madoffs lawyers told her to do. Why do you think that everyone who testifies before congress needs a lawyer, speaking out is more likely to put you in jail than to keep you out. There are exceptions, such as those going down anyway and turning on another to save their own skin. That is one of the rare times when cooperating with investigators would be a net plus.
Carla, Ballwin, MO
Under those circumstances, if he truly loved her, he shouldn't have involved her in the biz! Her punishment - living on $2.5 million!!!
Silver Surfer
The statement from Ruth Madoff's mouthpiece stinks under ice! How is it humanly possible not to know something was suspicious after 40 years? She's being dishonest about this, and so are the rest of the family. While it is possible all of Madoff's family suffers from delusional episodes, it is exceptionally unlikely that all of them could suffer this degree of mental disorder at the same time for that long a period. Somebody is lying, and she a prime suspect. Seize all of their accounts, filter through them with an extra fine toothed comb, and prosecute the guilty. Strip all of them of their ill gotten gains and serve them up to the mercy of their victims. Justice is served.
Equisse
Ruth, you want to redeem yourself? Take a lie detector test. If you pass, you can keep your designer clothes and spend the rest of your life helping to recover the money Bernie didn't spend on your free-wheeling lifestyle. If you fail, you auction your clothes, give the money to the people who paid for them, and you go to jail and learn to scrub toilets with a toothbrush. The same offer is available to your sons who I personally think are as guilty as you and your husband.
Paul
Ruth, you want to redeem yourself? Take a lie detector test and make the results public. If you pass, you can keep your clothes and spend the rest of your life helping the authorities to find the money and assets Bernie tucked away for emergencies. If you fail, you can go to prison and donate your designer clothes to the people mentioned previously, as well as help the authorities find the missing money and assets. The same offer is available to your sons who seem to be conveniently hiding from the people who supported the lavish lifestyle of the entire Madoff family. Personally, I think you and your sons deserve to be stripped of everything... just as your family has done to others.
jmf_stl
Madoff sentenced and out of the way, the greedy bastard. Now if we can get Barney Frank, Chris Dodd, Jamie Gorelick, and the rest of the real creators of the economies downfall maybe we will have something. But that won't happen.
bootyboot
she had to know what is up, "nothing gets past Ruth" is what Madoff even said about her. She is just as guilty and you know that silence means she knows more than she is implying.
j lynn
Would'nt it be funny if Ruth lost her investment? I think she should be left penniless and have to go get a job at walmart.
Steve
This is insane. The judge acted improperly and will be appealed successfully for a shorter term. Justice does not need emotion to be fulfilled. Why are we allowing this country to be governed and its laws enforced without common sense. This will wind up be 30 years but it will still be a life sentence for the sunset of his life.
Joe
Why should Ruth cooperate? If she doesn't know anything, why should she waste her time and spend what money she has left on attorney fees? The bigger question is what have the FEDs managed to find out on their own? It doesn't seem like they (FEDs) have discovered much on their own. Why are prosecutors counting on cooperation and not doing the forensic accounting necessary to find guilty parties and recover money?
Bob in Ky
Poor Ruth! Left with ONLY $2.5 Million! She must be really worried about how she will live from now on! I read today in another article that if that money is invested, she will only have about $125,000 a year to live on! What a bummer! Given the facts & circumstances, and, as per this story, what she is NOT saying, that she very probably knew MUCH more th an she's telling anyone. I hope that enough money is garnered from the forfeited assetts to completely reimburse all those who lost their life's savings, & are wondering how they're goint to make house payments, afford medical care, etc, etc. That guy is pure evil, & I don't think any of his family members are much better. I sure hope the Feds get to the bottom of this mess!
Rex Burgess
Wow, I'm actually shocked because I started to believe her. I don't care what people say; the best thing that could've happened to this country is freedom of the press. Yes, it's been abused, yes it's been used, but for true reporters telling it like it is, it's invaluable. Thank you for the other side of this rotten coin.
Ken
You don't have that much money and not even question where it comes from. Maybe the wife, but certainly not the well financially educated sons