Madoff Judges Block Disposal of Assets, Appoint Trustee

Jailed Wall Street swindler Bernard Madoff and his wife, Ruth, may not dispose of an estimated $100 million in real estate, investments, and other assets, which will remain under the supervision of a court-appointed bankruptcy trustee – at least for now, two federal judges have ruled.

The rulings figure to be a victory of sorts for investors who lost money in Madoff’s investment company, which he has now admitted was just an elaborate Ponzi scheme that ripped off thousands of investors to the tune of $65 billion over nearly 20 years.

U.S. District Judge Denny Chin ordered the block on Madoff selling off assets during the federal probe of the massive fraud. Prosecutors have said the Madoffs have sizeable assets, including real estate in New York City, Florida and Europe, cash, bonds, cars, luxury yachts, and other possessions. All of them may be seized and sold off in an effort to repay Madoff’s duped investors and creditors, although so far, only a fraction of the amount he is accused of stealing has been found.

Madoff pleaded guilty securities fraud charges on March 12, 2009 and faces up to 150 years in prison when he is sentenced in June.

Chin’s order means the Madoffs may not “transfer, sell, assign, pledge” or otherwise dispose of their property without permission from the court.

In a separate but certainly related court proceeding, U.S. Bankruptcy Judge Burton Lifland today appointed a trustee to the case, although it is still a mystery – either the trustee or federal prosecutors – currently have the keys to Madoff’s assets.

Last month, federal agents seized Madoff’s Palm Beach mansion and two luxury yachts anchored in Florida.

Some Madoff investors have sued the money manager seeking to force him into involuntary bankruptcy in an effort to preserve assets to be returned to them.

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