US Marshals seize Madoff's 2 boats in Fla

April 1, 2009 12:00:00 AM PDT
Federal authorities seized disgraced financier Bernard Madoff's antique yacht and a smaller boat from two Florida marinas early Wednesday, part of an effort to recoup assets to pay back his swindled investors. The 55-foot yacht named "Bull" and a 24-foot motor boat were taken from marinas on Florida's east coast, said Barry Golden, a spokesman for the U.S. Marshals Service. The yacht, a 1969 Rybovich, is worth $2.2 million.

"A lot of money was put into maintaining this boat," said Golden. "This boat was extremely well kept, extremely clean. Engine compartment was spotless. It looked like somebody took a bottle of 409 and scrubbed it every day."

Madoff, 70, is in jail pending sentencing for pleading guilty to charges he swindled billions from investors in what could be the biggest scam in Wall Street history. He faces a maximum sentence of 150 years behind bars.

Prosecutors are seizing as much as they can of Madoff's personal fortune, and have begun demanding millions of dollars in payments from his relatives. Roughly 6,700 people have filed claims for a share of whatever is recovered. Thousands more -- some who lost in excess of $1 million -- are expected to come forward.

Court documents filed by Madoff's attorneys have indicated Madoff and his wife had up to $826 million in assets at the end of last year -- including the boats. Madoff also has an $11 million, five-bedroom mansion in Florida's ritzy Palm Beach Island.

If prosecutors get their way, Madoff and his wife, who has not been charged, will have to give up all their assets, including a $7 million Manhattan penthouse bought in 1984, the Florida home, a $1 million home in Cap d' Antibes, France and a $3 million luxury home on New York's Long Island. The government also wants Madoff and his wife to forfeit $10 million in furnishings for all the homes and luxury cars, among other items.

Defense attorneys have indicated they may try to keep the Manhattan apartment, as well as about $62 million in securities, for his wife.

On Wednesday, Madoff's lawyer Ira Sorkin spoke briefly about the governmnet seizing his client's assets.

"We have no objecttion to the seizure or to the assets being sold," said Sorkin. "The proceeds of the sale will be put aside for discussion at a later date."

Also Wednesday, Massachusetts' top securities regulator accused a major feeder fund for Madoff's investment scheme of misrepresenting its lack of knowledge about Madoff's operations.

Secretary of State William Galvin accused Fairfield Greenwich Group of Connecticut of civil fraud charges, saying company officials were coached by Madoff on how to answer federal investigator's questions about his investment practices and misrepresented how much they really knew.

As far back as April 2008, Galvin said, Fairfield Greenwich principals began discussing the risk that Madoff would "blow up" but didn't disclose that risk to investors. He also said that Fairfield Greenwich kept a database of standardized responses to investors' questions, designed to reassure them that the firm had adequate controls to supervise assets at Madoff's company.

The administrative complaint seeks restitution for Massachusetts investors for losses from Fairfield Greenwich.

Fairfield Greenwich said in a statement the allegations are false and misleading and it intends to "vigorously" contest them. "FGG is appalled by the Madoff losses suffered by its investors, including its employees and the three investors who reside in Massachusetts," the statement said.

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Associated Press Writer Kelsey Abbruzzese in Boston contributed to this report.

(Copyright 2009 by The Associated Press. All Rights Reserved.)

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