Earlier this month, the U.S. District Court for the Southern District of New York rejected a motion by the federal government to put investment adviser Bernard Madoff in jail. Madoff is charged with securities fraud over his involvement in a $50 million Ponzi scheme.
Federal prosecutors had claimed that the investment adviser violated the conditions of his bail when he removed nearly $1 million in valuables from his New York home in December and sent them to friends and relatives. Items that were mailed reportedly included more than 13 watches, an emerald ring, a diamond necklace, two cufflink sets, four diamond broaches, and other expensive jewelry.
Prosecutors say that Madoff’s actions were in violation of a preliminary injunction that prevented him from breaking up his assets so that his investor fraud victims could obtain restitution. Madoff’s attorneys, however, claim that their client did not think he was doing anything wrong and did everything he could to get the items back after he was told that he shouldn’t have sent them.
According to Magistrate Judge Ronald L. Ellis, however, the prosecutors’ argument wasn’t enough to mandate incarceration and the government made too huge a “leap” when it claimed that the community became endangered because Madoff transferred his assets. The district court did impose more bail conditions so Madoff cannot move additional items. The court also noted that these supplemental restrictions would provide additional protections.
Meantime, the Financial Industry Regulatory Authority says it has received at least 19 complaints about Madoff’s broker-dealer enterprise. However, FINRA noted that the complaints pertained to trading execution issues and not retail investment advisory issues or allegations of a Ponzi scam or fraud.
Related Web Resources:
U.S. loses another bid to jail Madoff, CNN Money, January 14, 2009
Madoff Is a ‘Danger,’ Argue Prosecutors, WSJ Online, January 8, 2009
If you were a victim of Bernard Madoff’s ponzi scheme, contact our investment fraud law firm today.