Bernard Madoff Mailed Cartier, Tiffany Watches, Other Expensive Jewelry to Family & Friends

Prosecutors seeking to have Bernard Madoff’s bail revoked have filed court papers detailing items he attempted to mail to his sons and others.  Prosecutors contend that the alleged Ponzi schemer violated a court order not to dispose of any assets by mailing the valuables.  If Madoff’s bail is revoked, he would be required to leave his posh Manhattan apartment – where he is under house arrest – for jail.

Madoff has been under house arrest since his December 11 arrest for securities fraud.  The 70-year-old 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.  The FBI said Madoff  “deceived 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.” Madoff reportedly told employees that his fraud could cost investors as much as $50 billion.

According to, Madoff’s lawyer said his sons reported to prosecutors that their father had sent them jewelry and other items in violation of a court order freezing his assets.  Some items were also sent to his brother.   Madoff’s lawyer insisted the items were merely “heirlooms” sent innocently to his sons and brother, Bloomberg said.  But U.S. Attorney Marc Litt said in court on Monday that “transfer of valuables is a “changed circumstance” that warranted the revocation of bail.”

According to a letter from Litt to the judge presiding over the case that was filed today, Madoff and his wife sent multiple packages on Dec. 24 to relatives and friends, including his sons.  According to USA Today, the letter said one package contained 13 watches, one diamond necklace, an emerald ring and two sets of cufflinks – items estimated to be worth more than $1 million.  Two other packages contained a diamond bracelet, a gold watch, a diamond Cartier watch, a diamond Tiffany watch, four diamond brooches, a jade necklace and other assorted jewelry.

All of those packages have been recovered, the letter said. However, prosecutors said they did not know, and have not recovered, what was in packages sent to Madoff’s brother and an unidentified couple in Florida, USA today said.

“The need for detention in this case is clear,” Litt wrote in the letter to the judge. “The continued release of the defendant presents a danger to the community of additional harm and further obstruction of justice.

In other Madoff news, Bloomberg News is reporting that some defrauded Madoff investors could recover a portion of their funds in then next couple of months if their accounts with him are easy to trace.  Stephen Harbeck, head of Securities Investor Protection Corp. (SIPC), said that those with more-difficult-to-trace accounts might have to wait much longer.

The SIPC is a nonprofit organization funded by the securities industry to aid investors affected by failed firms that has started the process of liquidating the Madoff brokerage firm.  The organization’s funds cover securities and cash claims of as much as $500,000 per customer, including as much as $100,000 in cash.

According to Bloomberg, Harbeck said the Madoff case “is of a completely different order of magnitude” from anything the SIPC has seen before.

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