Bernard Madoff, awaiting trial for securities fraud, remained free on bail while a federal judge considered a request by prosecutors to send him to prison for mailing $1 million of valuables in violation of an asset freeze.
Madoff disposed of five items including “very valuable jewelry,” Assistant U.S. Attorney Marc Litt said yesterday in Manhattan federal court. The government has three of the items, Litt told U.S. Magistrate Judge Ronald Ellis. Defense lawyer Ira Sorkin said the objects, including watches and cuff links, were heirlooms innocently sent to Madoff’s relatives. Sorkin said he told his client to retrieve them and alerted the government.
Madoff, 70, was charged last month for allegedly directing a $50 billion Ponzi scheme out of his New York investment firm. He is free on $10 million bail while under house arrest and electronic surveillance. Litt said the transfer of valuables is a “changed circumstance” allowing the revocation of bail.
Ellis declined to immediately rule on the government request, asking for legal briefs from both sides by Jan. 7. As Madoff fought yesterday to stay out of jail, his alleged victims continued to detail their losses with him and regulators sought to identify assets they could use to repay customers.
Picard has identified $830 million in liquid assets in Madoff’s defunct brokerage firm, Bernard L. Madoff Investment Securities LLC, according to the Securities Investor Protection Corp. The assets may be subject to recovery by Madoff’s customers, SIPC Chief Executive Officer Stephen Harbeck told a congressional committee yesterday in prepared testimony.
At yesterday’s bail hearing, Litt argued that the mailing of the valuables by Madoff and his wife Ruth, which Sorkin said began Dec. 24, violated an agreement to freeze Madoff’s assets as part of a Securities and Exchange Commission lawsuit.
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