Madoff’s Brother Granted $10,000 a Month for Living Expenses; Other Assets Remain Frozen

Peter Madoff, the brother and business associate of admitted Wall Street con man Bernard Madoff, may have access to his seized assets in order to pay $10,000 a month for living expenses, a judge has ruled.

Peter Madoff’s assets, including his bank accounts, were frozen last week after a former investor, a 22-year-old New York City law student named Andrew Ross Samuels, sued Madoff for allegedly mishandling a $478,000 inheritance belonging to Samuels. The lawsuit claims Madoff skimmed the trust-fund money from accounts he managed and invested it in the $65 billion Ponzi scheme run by his brother.

All the while, Peter Madoff had “full knowledge” that his brother was operating “a fraudulent Ponzi scheme and nothing more than an unprecedented fraud,” Samuels claims in the lawsuit. Samuels received the inheritance in a trust fund he placed with Peter Madoff following his grandfather’s death in 2003.

New York state Supreme Court Judge Stephen Burcaria has just issued a ruling in the case, granting Peter Madoff access to the seized to pay for his monthly living expenses. Madoff, who appealed the earlier seizure of his assets, has agreed to limit his personal spending during the litigation of the lawsuit and not to dispose of his assets, which are described as substantial. He is said to own a home in the exclusive Long Island community of Old Westbury that is worth between $3 million and $5 million.

Peter Madoff, while not charged directly in the huge investment scam carried out by his brother, is one of only a couple people linked to Bernard Madoff to face criminal charges. Last month, the longtime accountant for Bernard L. Madoff Investment Securities was charged with lying to regulators and investors about having conducted independent audits of Madoff’s books.

Bernard Madoff pleaded guilty on March 12 to defrauding investors of billions of dollars in what is being called the largest Ponzi scheme in United States history. In a Ponzi scheme, early investors are paid profits from money contributed to the scam by later investors. He is now behind bars and faces up to 150 years in prison when he is sentenced in June 2009.

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