Bloomberg News

Madoff Sons’ Greenwich and Manhattan Homes Targeted by Trustee

July 18, 2012

Madoff Sons’ Greenwich and Manhattan Homes Targeted by Trustee

Andrew Madoff, son of Ruth and Bernard Madoff, at his apartment in New York. Photographer: Chang W. Lee/The New York Times via Redux

The trustee liquidating Bernard L. Madoff Investment Securities Inc. is laying claim to four homes owned by Bernard Madoff’s two sons and their spouses as he seeks to recoup money lost in the Ponzi scheme.

Irving Picard filed so-called lis pendens notices last week on two homes in Greenwich, Connecticut, and two luxury condominiums in Manhattan purchased by Mark and Andrew Madoff and their wives, according to public records. The documents alert potential buyers and lenders that Picard may have a legal claim to the real estate after a lawsuit seeking to recover about $255 million from the Madoff family is resolved.

Madoff’s firm “was operated as if it were the family piggy bank,” according to a revised lawsuit filed May 4 with the U.S. Bankruptcy Court in Manhattan, which adds Stephanie Mack, Mark Madoff’s widow, and Andrew Madoff’s wife, Deborah, as defendants. “Each of the family and spouse defendants received directly or indirectly huge sums of customer property from BLMIS to fund personal business ventures and personal expenses such as homes, cars and boats.”

The homes in Picard’s notices filed July 10 include a condominium at 583 Broadway in Manhattan’s SoHo neighborhood, according to real estate data website PropertyShark.com. Mark and Stephanie Madoff purchased the apartment in 2005 for $6.08 million, records filed with the New York City Department of Finance show.

Mother’s Loan

Mark’s mother, Ruth Madoff, lent him about $5.6 million from the family business in connection with the purchase and it was never repaid, according to the trustee’s lawsuit.

The second Manhattan property, Andrew Madoff’s apartment at 433 E. 74th St., was purchased in 2008 with a loan of about $4.49 million from his father, according to the lawsuit. The money was wired directly to Andrew’s real estate agents and lawyers, Picard’s complaint says.

The five-bedroom condo with limestone bathrooms and “Air- Spa tubs” was bought for $4.38 million, 1.8 percent more than the asking price at the time, according to StreetEasy.com, a property-listings website. Madoff put the 3,200-square-foot (297-square-meter) unit on the market for $4.5 million in March but removed it after seven days, StreetEasy shows.

The trustee is also laying claim to two homes in Greenwich -- 57 Tomac Ave., which Andrew and Deborah Madoff purchased in 1996 for $400,000; and 21 Cherry Valley Road, bought by Mark Madoff in March 2000 for $2.23 million, according to the town assessor’s office.

Account Transfers

Funds for Andrew’s deal came from a $100,000 transfer from his investment account at Bernard L Madoff Investment Securities and a $300,000 transfer from the firm described as a loan from Ruth Madoff, according to Picard’s lawsuit. Mark’s purchase was funded in part through transfers from an operating account at his father’s company, the complaint says.

“The Trustee has found no evidence that such a loan was ever serviced or the amounts repaid,” according to the suit.

Amanda Remus, a spokeswoman for Picard, declined to comment. Stephen Shimshak, an attorney for Andrew Madoff and executor of Mark Madoff’s estate, didn’t return a voice mail.

The Madoff firm began liquidating in December 2008, with Picard’s appointment under the U.S. Securities Investor Protection Act. Bernard Madoff is serving a 150-year prison sentence following a guilty plea. Mark Madoff committed suicide in December 2010.

The family lawsuit is Picard v. Estate of Mark Madoff, 09-01503, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The Madoff liquidation case is Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities Inc., 08-01789, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Oshrat Carmiel in New York at ocarmiel1@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net


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