What Bernie Made-off With and How You Can Avoid Being Taken to the Cleaners by Unscrupulous Investment Schemes

Why is Bernie smiling/
Why is Bernie smiling/

Living Large with Bernie and Ruth

Bernie's lawyers filed a financial statement March 13 with the U.S. Court of Appeals for the Second Circuit listing his net worth at $823 million, far short of the $60 billion lost to investors in his Ponzi scheme. $700 million of Madoff's net worth was attributed to his ownership in his market-making business which has been seized by the trustee that is overseeing the liquidation of the firm.

Here are the Madoffs' main personal assets listed in the document filed with the court:

House on Long Island................................$3 million

Art and furniture........................................$10 million

Real estate owned by Ruth Madoff........... $19 million

Ruth Madoff's jewelry................................$2.6 million

Bull, a boat on Long Island................ $320,000

Little Bull, a boat in Florida.........................$25,000

Boat slip and yacht in France.....................$8.5 million

50% of an aircraft $12 million

Steinway Piano...............................................$39,000

Silverware at Manhattan apartment.................$65,000

The document listed liabilities of $265,000 including $100,000 in credit card debt, and $151,000 in real estate taxes which have been paid.

According to the statement the Madoffs had expenses of $346,000 for insurance premiums, maintenance charges and boat storage, monthly charges for a housekeeper at their Manhattan apartment of $2860 and a yacht captain for Madoff's boat, $5250 a month.

Madoff's wife, Ruth, owns nearly all of their real estate in New York, Florida and France as well as their automobiles and yachts. Previous news reports put her assets at $70 million.

Source: NY Times article by Zachary Kouwe 3-14-09

Ruth Madoff
Ruth Madoff

How to Avoid Being Taken in by Ponzi Schemers Like Bernie Madoff

Bernie Maddow perpetrated the largest ponzi scheme in history. He was extraordinarily successful in separating knowledgeable investors from their money because he was very clever had good connections and he had many years experience in managing other people's money.

The key to avoiding being taken is to approach any investment proposal with a healthy degree of skepticism--especially about claims of extraordinary, low risk returns. There is virtually no such thing as a high return, low risk investment. Exceptions to the rule that the higher the return the greater the risk are very rare or non-existent.

Be especially skeptical about claims from friends and relatives about extraordinarily high returns. They may be receiving high returns paid them from funds deposited by the latest group of suckers.

Don't believe everything you hear at investment seminars and read in investment brochures. Check with independent sources.

Check up on the individual or firm with state and federal authorities to see whether they are registered representatives and securities dealers. If not, don't give them any of your money.

Insist on monthly statements and check their accuracy. Any delays in honoring your request to withdraw funds should be viewed with great suspicion.

Deal with recognized first rate investment management firms like Vanguard or other mutual fund providers.

Where to get help

For questions about a broker, adviser or investment -- or to file a complaint, obtain information or report suspicious activity -- contact the following agencies or organizations:

• U.S. Securities and Exchange Commission, which was created to protect investors; maintain fair, orderly and efficient markets, and facilitate capital formation. Call 800-732-033.

• U.S. Commodity Futures Trading Commission, which was created to regulate commodity futures and option markets in the U.S. Leave a message on the consumer hot line, 866-366-2382.

• National Futures Association , to find out whether a broker or firm is registered, call 800-676-4632.

Financial Industry Regulatory Authority (FINRA) , which regulates securities firms doing business in the U.S. Call 301-590-6500.

•Your state office of securities regulation can tell you whether the individual attempting to sell you an investment product is licensed in your state and whether an investment professional or firm has a history of disciplinary action.

You bank may offer adivce on investment proposals, and a fee-for-service (not a commission salesman) investment adviser can provide you with advice and information on an investment proposal.

The bottom line for most investors is to investigate all investments carefully, deal only with reputable firms; and don't put all your eggs in one basket because, as the article linked below on the recent $180 million fraud settlement by Securities America shows, even the most reputable firms sometimes sell bad fish to their clients and put their own interest ahead of their customers.

[Securities America bills itself as one of the nation's largest broker/dealers, supports over 1900 independent financial professionals with investment and advisory products ...It's parent Ameriprise's home page says the following:

Bernie's House in Florida
Bernie's House in Florida
Bernie's Yacht, Bull
Bernie's Yacht, Bull

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Comments 22 comments

Vladimir Uhri profile image

Vladimir Uhri 7 years ago from HubPages, FB

Thanks for very interesting information.

Paraglider profile image

Paraglider 7 years ago from Kyle, Scotland

Ralph - I'd settle for the Steinway piano. I could use that and so could my daughter. The rest is just frippery ;)

Well, some of the art works might be worth a look, but I'd expect him to have poor taste...

Iphigenia 7 years ago

Thanks for the info - I can't even imagine those amounts of money.

ColdWarBaby 7 years ago

Noblesse Oblige. Right.

This is the amerikan aristocracy.

Ralph Deeds profile image

Ralph Deeds 7 years ago Author

Thanks for the comments. Sad story.

Ralph Deeds profile image

Ralph Deeds 7 years ago Author

Alexander Cockburn in The Nation made an interesting and perceptive comment about the motives of some of Madoff's victims-

Alexander Cockburn got it right on the motives of the Madoff victims

Cockburn---"On the other hand, I lend a more receptive ear to those who say that at least some of Madoff Sr.'s clients were not so naïve as to believe he had a virtuous investment model that permitted him to report 10-12 percent annual returns on capital invested, through boom and bust. They thought Madoff indeed had a secret model, but one coming in the distinctly unvirtuous form of insider information.The most gullible marks are those who preen themselves as being privileged accomplices in a profitable conspiracy where they have no personal exposure to legal sanctions. Madoff's prosperous victims fatally miscalculated the dimension of the swindle. As instruction on how to get through life in one piece, Madoffgate is proof of the old rule: the more elegant the tailoring, the more handsomely silvered the distinguished locks, the more innocently rubicund the visage, the more likely the hand covertly fishing for one's wallet." in The Nation

Ralph Deeds profile image

Ralph Deeds 7 years ago Author

Ruth Madoff sued for $44.8 million by trustee for victims of Ponzi scheme.

Fairfield Greenwich Advisors was sued by Massachusetts Attorney General for lack of due dilligence amounting to fraud. The firm acted as a feeder fund and directed billions of dollars of clients money to Madoff.

Ralph Deeds profile image

Ralph Deeds 7 years ago Author

Another Madoff-related casualty--Jeffrey Picower found dead in his Palm Beach swimming pool.

Ralph Deeds profile image

Ralph Deeds 6 years ago Author

Wages of Sin--A law enforcement official tells The Associated Press that a son of Bernard Madoff has been found dead in New York City of an apparent suicide.

The official says Mark Madoff was found hanged in his Manhattan apartment.

A family member notified police around 7:30 a.m. Saturday.

Ralph Deeds profile image

Ralph Deeds 6 years ago Author

A prominent Austrian banker who portrayed herself for two years as one of Bernard L. Madoff’s biggest victims was accused on Friday of conspiring for 23 years to funnel more than $9 billion into his immense global Ponzi scheme.

Ralph Deeds profile image

Ralph Deeds 6 years ago Author

Two years ago, Bernard Madoff told his sons that his multi-billion-dollar business was "one big lie." That confession unleashed one of the biggest fraud investigations in history. Since then, the wheels of justice have turned slowly.


Ralph Deeds profile image

Ralph Deeds 6 years ago Author

Billionaire Widow of Madoff Investor Does the Right Thing

"Federal prosecutors and the trustee charged with recovering assets in the Bernard L. Madoff bankruptcy announced settlements Friday that would add $7.2 billion to the cash available to compensate victims of Mr. Madoff’s global Ponzi scheme.

Details of the agreements with the estate of Jeffry M. Picower, a Palm Beach philanthropist who died in October 2009, were released in court documents and at a news conference in Lower Manhattan.

The settlements “will return every penny received from almost 35 years of investing with Bernard Madoff,” Mr. Picower’s wife, Barbara, said in a statement released through her lawyer, William D. Zabel of Schulte Roth & Zabel.

"The Picower estate will pay $5 billion to the trustee, Irving H. Picard, and $2.2 billion to a federal victims fund to resolve a lawsuit filed last year, according to statements from Mr. Picard and United States attorney for the Southern District, Preet Bharara."


Ralph Deeds profile image

Ralph Deeds 5 years ago Author

Securities America and its Parent Financial Advisor Ameriprise are said to Reach $180 Million Settlement in Fraud Case

Securities America has reached a settlement with hundreds of former clients, a deal that will require it and its parent, Ameriprise Financial, to pay approximately $180 million to people who lost money when two private placements the firm sold turned out to be frauds, according to people briefed on the agreement.


Ralph Deeds profile image

Ralph Deeds 5 years ago Author

The Lasting Shadow of Bernie Madoff

To date, almost $11 billion has been recovered, more than half of the estimated $18 billion in cash that vanished in the Ponzi scheme.


Ralph Deeds profile image

Ralph Deeds 3 years ago Author

5-27-13NYTimes--Bernie Madoff's House for Sale

Selling a Madoff Home - NYTimes.com

The Marshals Service is offering for $4.495 million a grand Long Island home that belonged to Peter Madoff, Bernard’s brother and co-conspirator in a historic Ponzi scheme.

Carlos 3 years ago

Nice Ralph, you have been talking to only yourself on your own Hub for 4 years.

Ralph Deeds profile image

Ralph Deeds 3 years ago Author

True. I've had around 1,000 page views, but yours is the only recent comment. I've tried to keep the story up-to-date as developments occur. There are plenty of other Madoffs lurking in the weeds for the unwary.

tammyswallow profile image

tammyswallow 3 years ago from North Carolina

Wow! I didn't realize Madoff made off with so much money. That is unreal. This situation makes people like me hesitant to make large unsecured investments. Great expository article!

Ralph Deeds profile image

Ralph Deeds 3 years ago Author

12-8-13NYTimes "Madoff Victims, Five Years the Wiser"

Madoff Victims, Five Years the Wiser - NYTimes.com

Speaking from experience, victims of the Madoff Ponzi scheme advise other investors to diversify their savings, focus on what really matters in life and resist giving up.

Ralph Deeds profile image

Ralph Deeds 3 years ago Author

JPMorganChase settles Federal fraud charges for $1.7 billion in Madoff Case.


Ralph Deeds profile image

Ralph Deeds 3 years ago Author

"“JPMorgan as an institution failed and failed miserably,” Preet Bharara, the United States attorney in Manhattan whose office ran the case, said at a news conference on Tuesday.

"George Venizelos, a senior F.B.I. official, added that “JPMorgan failed to carry out its legal obligations while Bernard Madoff built his massive house of cards.”

"JPMorgan, having served as Mr. Madoff’s primary bank for more than two decades, had a unique window into his scheme. In a document outlining the bank’s wrongdoing, prosecutors argued that “the Madoff Ponzi scheme was conducted almost exclusively through” various accounts “held at JPMorgan.”

"On two occasions, in 2007 and 2008, JPMorgan’s own computer system raised red flags about Mr. Madoff, according to prosecutors. But both times, prosecutors say, JPMorgan employees 'closed the alerts.'

"The F.B.I. and prosecutors traced the problem to JPMorgan 'willfully' failing to create sufficient controls against money laundering. 'There was no meaningful effort by the Bank to examine or investigate the Madoff Securities banking relationship,' prosecutors said...."


Ralph Deeds profile image

Ralph Deeds 2 years ago Author

1-10-14NYTimes "In Fund Expenses, Those Tenths of a Point Mean a Lot" Conrad de Aennle

Log In - The New York Times

“Expenses always matter,” said Christine Benz, director of personal finance for Morningstar. “Fund buyers have no control over interest rates or the economy or how markets perform, but they do exert some control over investment-related fees.”

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