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The Truth About Ruth: What Belongs To Mrs. Madoff?

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Mar 16, 2009 10:36 pm US/Eastern

The Truth About Ruth: What Belongs To Mrs. Madoff?

Investigators Seek Freeze On Wife's Assets Totaling $69 Million

Reporting
Don Dahler
NEW YORK (CBS) ― Follow the money.

The federal government is now going after Bernard Madoff's wife, Ruth, and they're not holding back. Prosecutors want Ruth Madoff's penthouse…and that's just for starters.

The jail cell in which Bernie Madoff spends his days could fit inside one of his wife's bathrooms in her $7 million Upper East Side apartment. But federal investigators are moving to freeze her assets, including the apartment.

"It means she can't spend them. It means she can't waste them, can't transfer them to other relatives or friends or deposit them in offshore bank accounts," says U.S. Attorney Zachary Carter. 

 Court Filings: List Of Potential Forfeitures

According to court documents, those assets are Madoff's $700 million business, $45 million securities, $17 million in deposit accounts; Ruth's jewelry, valued at $2.6 million; a Steinway piano; and silverware worth over $100,000, which are spread out among homes in New York, Florida, and France – real estate holdings worth $22 million. That adds up to a grand total of at least $283 million.

Madoff's attorneys argue some of those assets, including the real estate, belong to Ruth; but they don't explain what she used to acquire them.

"The only source of income that we think that Ruth Madoff had was when she wrote a cookbook, and indeed it was not a best-seller," said CBS News contributor Lucinda Franks.

Mrs. Madoff has not been charged with any wrongdoing, but in addition to looking into her possible involvement in the $64 billion Ponzi scheme, federal investigators want to know about the couple's children, along with Bernard Madoff's brother and niece.

"He paid Shana, his niece, the compliance legal counsel. We think it's $650,000," said Franks.

Even if Ruth is not prosecuted, there's only one way she can keep her millions out of the hands of the thousands of her husband's victims:

"Ruth Madoff would have to establish that either she received some or all the proceeds before the scheme was effectuated, before the crime was committed," said Carter.

That will be a challenge, given Ruth inherited only $37,000 from her father, and her husband's Ponzi scheme began at least 15 years ago.

Other than the cookbook, there is no other apparent source of income. Of course, even finding that money will pose a challenge for investigators.

Saying he could not "adequately express how sorry I am for what I have done," Madoff pleaded guilty last week to defrauding investors of billions. His bail was immediately revoked and he was sent to a Manhattan correctional facility to await sentencing that could amount to 150 years.

He has filed an appeal on the bail decision, with his lawyers saying he had not been a flight risk leading up to his guilty plea, even though he could expect to die in prison.

His sentencing is scheduled for June 16. 

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