How Much Did Madoff Family Know?
Questions about how much the family of disgraced hedge-fund manager Bernard Madoff knew about the $50 billion Ponzi scheme he allegedly operated keep emerging two months after the former NASDAQ chairman was arrested and proclaimed himself the sole conspirator.
Madoff's wife, Ruth Madoff, came under additional scrutiny this week after Massachusetts officials discovered she withdrew more than $15 million from Cohmad Securities, a firm co-owned by her husband, including $10 million on the day their children turned her husband over to authorities.
Madoff's wife has described herself in the past as a director in the firm and had handled some bookkeeping in the 17th floor office of the Third Avenue building known as the Lipstick Tower in Midtown Manhattan, according to published reports.
Madoff's two sons, 42-year-old Andrew Madoff and 44-year-old Mark Madoff, and brother, 62-year-old Peter Madoff, all worked for Bernard L. Madoff Investment Securities. Andrew and Mark oversaw the firm's stock-trading desks while Peter was the company's general counsel (Peter was apparently the heir to brother Bernard's company; the two avoided flying together for fear of a plane crash).
Shortly after Bernard Madoff confessed to the authorities, an inquiry by federal investigators into how much the three Madoff relatives knew uncovered no collusion, The New York Times reported in December.
It later emerged that two years ago, Bernard and Peter transferred the ownership of their lavish Florida homes to their respective wives, who then applied for homestead exemptions, as CBS News' Armen Ketayian has reported. It was about the same time federal regulators began probing Madoff Investment's holdings.
There were still other family connections in the firm. Madoff's niece, Shana Madoff, began working at Madoff Investment Securities in 1995 as an in-house counsel. A nephew, Charles Wiener, (the son of Bernard's sister, Sandra Madoff) served as director of administration. Another nephew and son of Peter, Roger Madoff, worked at Primex Trading, a trading subsidiary. (Mark, Andrew and Shana also started their own energy exploration and production company, Madoff Energy, in 2007 to profit from skyrocketing energy prices.)
"All of his family members grew up with this being our lives," Mark Madoff said in a 2000 FinanceTech profile of Madoff called "Family Influence." "When it is a family operated business you don't go home at night and shut everything off, so you take things home with you, which is how all of us grew up."
By Derek Kravitz |
February 12, 2009; 11:57 AM ET
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Posted by: crisericson | February 12, 2009 6:04 PM