Ruth Madoffs knew about the fraud

More than 100 former clients who lost money in the $65bn Ponzi scheme outline the devastation wrecked on their lives

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She was a shareholder in Bernard Madoff’s London business, for which she was paid a dividend each year of less than $200,000, according to the article. She kept an office on the 18th floor of the Lipstick Building in Manhattan, the headquarters of Madoff’s investment and trading business. Mrs Madoff also had an account with Cohmad Securities, the brokerage firm set up by Madoff and friend Maurice Cohn.

One of the family’s yachts, named Bull, was held by Yacht Bull Corporation, in which Ruth Madoff had an interest. Madoff made substantial loans to Madoff Technologies, which was part-owned by Mrs Madoff.

Ruth Madoff’s oversight of her husband’s activities makes it difficult for many to believe that she had no knowledge of her husband’s fraud. Erin Arvedlund tells how Mrs Madoff’s father Saul Alpern encouraged friends and business partners to invest with Madoff early in his career.“She wasn’t this dumb blonde — she was smart with numbers,” Ms Arvedlund said. “So I find it hard to believe that if Ruth’s father was one of Bernie’s original fund-raisers, and she was there at the inception helping keep the books, how could she not know that Bernie had an ‘advisory business’ and that he was not registered with the SEC [Securities and Exchange Commission, until 2006]? Was it a Ponzi scheme at that point? I don’t know.”But others point to court documents that show that Mrs Ruth Madoff and her sister Joan were co-trustees of trusts created by their parents, assets from which were invested in Madoff’s fraudulent business.

Jerry Reisman, an attorney who represents 16 Madoff victims, said: “No wife who inherits money from a parent gives that money to a husband who she believes or knows is conducting an investor fraud …That investment dates back to 1999. At least up until that period, to my knowledge, she had no knowledge of the fraud.”

Carmen Dell’Orefice, the model who was a close friend of the couple as well as an investor in the scheme, described Ruth Madoff as a “courtesan”, always deferring to Madoff’s wishes.

Julia Fenwick, the manager of Madoff’s London office, also describes a woman dominated by her husband. “Ruth wasn’t independent. Ruth was absolutely under Bernie’s thumb. If Bernie said, ‘Jump,’ Ruth would say, ‘How high?’ If her makeup was slightly off, he’d say, ‘What happened to your face?’ For Ruth, looking good was all for Bernie,” Ms Fenwick said.

Ruth Madoff gave up $80 million of the couple’s wealth in a deal with Government prosecutors, including their $7.5 million Manhattan penthouse.

In return, she was allowed to keep $2.5 million that the investigators were unable to link with the fraud. But Irving Picard, the trustee appointed by the Government to sell Madoff assets to obtain compensation for investors, last week sued Mrs Madoff for $45 million to be returned to victims.

Mrs Madoff was told by a judge yesterday that she must submit monthly accounts to Mr Picard, outlining every expenditure of more than $100.

In a statement to Vanity Fair, Peter Chavkin, Mrs Madoff’s attorney, said: “[Ruth Madoff] did not know of or participate in her husband’s wrongdoing and all financial decisions, including Cohmad, the running of all Madoff companies, and investments in vehicles like Madoff Technology were made by Bernie for Ruth without Ruth’s participation”. Source: http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6738696.ece

Authorities have seized $2.6m in jewelry from Ruth. Pics by AP.

Why did RuthOf course, that's what her husband wanted - people are pretty sure he's committed to going down solo - and it seems like she doesn't know how to operate outside his orbit. But still, I wonder if this doesn't factor into our contempt (not that there aren't plenty of legitimate reasons for it): she's getting off scot-free...and letting him go it alone. At best this is blind loyalty in the face of self-respect. At worst, despicable - and still depdendent. Is it just that she's out and free and relatively affluent? Sure. But I think there's another element that adds to our vitriol, and has spared Madoff's sons and brother. Yes, she's stood by him; yes, she visits him as often as possible. But compared to a life of such unity, this feels discordant. And I think we hate what we don't understand almost as much as what we know is deeply wrong. Ruth gives us both. stay with Bernie during his three months of house arrest-apparently at the cost of losing her sons, Mark and Andrew, who say they haven't spoken to their mother since the still not fully explained day in their parents' kitchen when Bernie confessed his crime to them with Ruth standing nearby? She's still under scrutiny by investigators, as are her sons, Bernie's brother, and Frank DiPascali Jr. and Annette Bongiorno, who directed Madoff's investment-advisory business, on the 17th floor of the Lipstick Building, in Manhattan. One longtime observer of the Madoffs told me that Ruth's statement, like everything preceding it in the case, may very well be just one more example of Bernie Madoff's brilliance at deception and manipulation. He always ran the show, and probably still does, the observer believes. From the day he turned himself in and pleaded guilty, Madoff was determined to take the fall alone. He continues from behind bars to try to control every detail of his destiny, including, at least one person is willing to venture, Ruth's statement.

Of course, that's what her husband wanted - people are pretty sure he's committed to going down solo - and it seems like she doesn't know how to operate outside his orbit. But still, I wonder if this doesn't factor into our contempt (not that there aren't plenty of legitimate reasons for it): she's getting off scot-free...and letting him go it alone. At best this is blind loyalty in the face of self-respect. At worst, despicable - and still depdendent. Is it just that she's out and free and relatively affluent? Sure. But I think there's another element that adds to our vitriol, and has spared Madoff's sons and brother. Yes, she's stood by him; yes, she visits him as often as possible. But compared to a life of such unity, this feels discordant. And I think we hate what we don't understand almost as much as what we know is deeply wrong. Ruth gives us both.

Source:Vanity Fair, Mark Seal