Madoff's Wife Withdrew $15 Million Before His Arrest, Regulators Say

By Glen Johnson
Associated Press
Thursday, February 12, 2009

BOSTON, Feb. 11 -- The wife of disgraced money manager Bernard L. Madoff withdrew more than $15 million from a firm co-owned by her husband, including $10 million on the day their children turned her husband over to authorities for overseeing an alleged $50 billion Ponzi scheme, the top securities regulator in Massachusetts said Wednesday.

Secretary of State William Galvin said Ruth Madoff, 67, withdrew $5.5 million on Nov. 25 and $10 million on Dec. 10 -- the day before Bernard Madoff was arrested -- from Cohmad Securities, a New York firm co-owned by her husband.

Galvin cited wire transfer records produced by Cohmad as proof of the withdrawals. They came as 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 have already said investigators found 100 signed checks worth $173 million that Madoff was ready to send out to his closest family and friends at the time of his arrest in December. Two weeks later, during the Christmas holidays, Madoff sent more than $1 million in jewelry and heirlooms to family and friends.

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

In New York, meanwhile, the government and lawyers for Madoff agreed to a 30-day delay in the Wednesday deadline for obtaining a grand jury indictment against the money manager. The new deadline is March 13.

As he had during a similar extension a month ago, Assistant U.S. Attorney Marc Litt wrote that the government requested 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 Madoff's lawyers.

Madoff was arrested Dec. 11 after investigators said he confessed to his sons that he had swindled investors through a mammoth Ponzi scheme in which early investors were paid with money raised from new investors. Madoff, a 70-year-old former Nasdaq stock market chairman, is confined to his Manhattan penthouse under house arrest.

Galvin said the discovery of Ruth Madoff's withdrawals raises questions about whether there was a broader conspiracy behind Bernard Madoff's actions. Madoff has projected himself as someone who acted alone.

Galvin made his disclosure in a complaint asking Massachusetts state regulators to stop Cohmad -- a brokerage firm apparently named by merging the last names of co-founders Maurice Cohn and Madoff -- from doing business in Massachusetts because it failed to provide information to Galvin about its relationship with Madoff.

Galvin said Cohmad officials have ignored subpoenas or given incomplete responses as part of the state's probe of how Massachusetts investors lost money in the Madoff scheme.

Associated Press writers Russell Contreras in Boston and Larry Neumeister in New York contributed to this report.

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