Bernard Madoff has agreed to give up the rights to his disgraced investment business and his company's prized artwork and entertainment tickets as he faced another appearance in a federal courtroom Wednesday.
Prosecutors requested the hearing Tuesday so Madoff can appear in court with his lawyer, Ira Sorkin, because they believe the attorney may have conflicts of interest in the case. Sorkin also represents Madoff's wife and several others in relation to the Madoff case.
The attorney said there was no conflict of interest and the issue can be completely resolved if Madoff tells the judge Wednesday that he has no problem with Sorkin representing him.
Madoff has been under house arrest at his Manhattan penthouse as the government investigates how he carried out a fraud he said was about $50 billion. His court appearances in the weeks after his arrest generated huge attention amid an uproar over his release on bail.
In a separate development, the trustee overseeing the liquidation of Madoff's business said the former money manager was surrendering ownership rights to his business, Bernard L. Madoff Investment Securities LLC, along with the company's artwork and entertainment tickets. The trustee, Irving Picard, did not specify the value of the property or say what kinds of tickets and artwork Madoff possessed.
The ultimate goal is to put some of Madoff's remaining assets in the hands of investors who lost their life savings amid the scandal, and there are growing signs that some of them could see relief in coming weeks.
Stephen Harbeck, president of the Securities Investor Protection Corp., told The Associated Press on Tuesday that a group of 10 investors were sent forms late last week or early this week informing them whether they were eligible to receive funds from the organization. SIPC is an industry-funded group that rescues investors when brokerage firms fail, paying them up to $500,000 to recoup losses.
“I would hope some of them will get money very, very soon,” he said.
Harbeck said he expected that the first checks could be mailed before April and possibly sooner and that the organization's $500,000 cap would apply to most of Madoff's customers.
Harbeck said the work of his organization was slowed because Madoff's records do not reflect what was in the accounts of investors.
Harbeck said he believes the $50 billion fraud figure is based on a calculation of all the false profits investors would have received if the business was as successful as Madoff had claimed.
He said the organization was working to bring relief to investors as fast as possible, but noted that for some no relief can be fast enough.
“To someone who has lost money and is in dire financial straights, we understand it cannot be fast enough,” he said.
On Monday, a judge said in court papers Madoff and his lawyers are claiming that his $7 million Manhattan penthouse and an additional $62 million in assets can be kept from investors because they are in his wife Ruth Madoff's name and are not connected to any alleged fraud.
Stephen A. Weiss, a lawyer who represents about 100 investors, including one with more than $100 million in assets, said investors won't stand for the Madoffs keeping millions of dollars.
“Bernie Madoff has no shortage of chutzpah to suggest as he does that his wife was not the beneficiary of his fraud. It is not only senseless, but offensive,” he said.
“Moreover, it's been widely reported that she served as his bookkeeper for a number of years. If true, not only is she civily culpable, but criminally as well,” Weiss said.
Ruth Madoff has not been charged in the case.