Feds: Madoff Had $173 Million in Checks for Friends, Family, Others

Federal prosecutors claim that Bernard Madoff had 100 checks in his desk—about $173 million worth, made out to friends, family, and employees— and that he would have sent them out, if not for the FBI arresting him. Madoff, who admitted that his investment empire was actually a Ponzi scheme of up to $50 billion, has been under house arrest (he put up $10 million in bail), but the U.S. Attorney's office wants him in jail, noting the many checks plus the packages of expensive jewelry he mailed to relatives are signs he's trying to hide assets.

Assistant U.S. Attorney Marc Litt wrote in a letter to the judge, "The defendant’s recent distribution of jewelry and watches demonstrates a continuing intention to benefit those close to him to the detriment of his victims." Of Madoff's lawyer's claim that these were an innocent mistake while trying to get in touch with family, Litt said, "That’s what telephones, e-mails, and personal letters are for." The feds also point out that Madoff's lawyers are neglecting to mention that their client wanted to distribute the remaining $200-300 million in investors' assets before turning himself in for the scam.

The feds are also unhappy that Madoff stopped cooperating with them, as they try to find out where the money went. Magistrate Judge Ronald Ellis will decide whether to revoke Madoff's bail tomorrow or Monday; we hope he read this Times story about the senior citizens in a nursing home who may have lost all their savings with Madoff.

Update: Now Reuters reports that Madoff transferred $160 million of his own assets to his UK firm back in 2007. Britain's Serious Fraud Office is investigating.