A federal bankruptcy judge has approved a transfer of $28 million in assetsÂ held by alleged Ponzi schemer Bernard Madoff to the trustee overseeing the case.Â The funds will be used to pay for the administrative costs related to the liquidation of Madoff’s business.Â Meanwhile, as more investors filed lawsuits seeking to recover money they lost as a result of his alleged investment fraud, Madoff faces a year-end deadline to furnish federal regulators with a list of his personal assets.
The 70-year-old Madoff was arrested on one count of securities fraud on December 11.Â Madoff – once a chairman of the Nasdaq stock exchange – is the founder and primary owner of Bernard L. Madoff Investment Securities LLC. The firm is primarily known for its business in market-making, or serving as the middleman between buyers and sellers of shares. However, Madoff also oversaw an investment-advisory business that managed money for high-net-worth individuals, hedge funds and other institutions.
According to the FBI complaint against Madoff, that business was largely a Ponzi scheme.Â The FBI said MadoffÂ â€œdeceived investors by operating a securities business in which he traded and lost investor money, and then paid certain investors purported returns on investment with the principal received from other, different investors, which resulted in losses of approximately billions of dollars.â€ Madoff reportedly told employees that his fraud could cost investors as much as $50 billion.
Shortly after Madoff’s arrest, a federal judge ordered that his business be liquidated under the jurisdiction of a bankruptcy court and assigned aÂ trustee to oversee that process.Â According to CNN.com, court papers filed in that bankruptcy indicate that Bank of New York Mellon Corp. has agreed to transfer the $28 million in assets to the trustee overseeing the liquidation.Â The court papers also said that $883,000 had already been transferred to the trustees to pay employees’ salaries and health care benefits.
CNN said the fundsÂ are needed to pay employee salaries and other costs. Some of the assets could also be sold off to recover money for investors, CNN said.
Meanwhile, three residents of Massapequa Park, New York became the latest angry investors to file suit against Madoff in Manhattan federal court.Â According to Bloomberg.com, Anthony, Maria and Toni Sciremammano claim to have been investing with Madoff since 1995, and by September had invested a total of about $2 million.Â In addition to asking for $2 million in damages, the plaintiffs are also seeking to have Madoff’s assets permanently frozen so they cannot be transferred to his family and friends.
Investors like the Sciremammanos might soon have a better idea about the value of Madoff’s assets.Â According to the Associated Press, Madoff is scheduled to submit a list of his personal assets to the Securities and Exchange Commission by the end of the year.Â The list is to include what property that could be sold to make restitution to victims of his alleged fraud, the Associated Press said.Â Madoff’s lawyer told the Associated Press that his client intends to meet that deadline.