September 2, 2009 in Business

Madoff assets hit the market

Three homes, furnishings set for quick auction
Tom Hays Associated Press
The Spokesman-Review photo

Bernard Madoff’s beachfront home in Montauk, N.Y., is not the palatial estate one might expect of a man who ran a multibillion-dollar Ponzi scheme.
(Full-size photo)(All photos)

MONTAUK, N.Y. – Those who see Bernard Madoff as an evil purveyor of excess might be disappointed by his beach house: It’s not that palatial.

At 3,014 square feet, the home is cottage-size by super-rich standards. Its faded furnishings look as old as Madoff’s epic fraud. There’s no garage. Not even a walk-in closet.

But the 1.2-acre lot sits closer to the surf than larger neighboring homes on the southeastern tip of Long Island. And the house features a grand, columned porch with stunning views – undeniable selling points on display during a recent tour offered to the Associated Press.

The U.S. Marshals Service, which seized the property just east of the Hamptons on July 1, will put the property on the market this week as part of an ongoing effort to pay back burned investors.

They also plan to enlist brokers soon to find buyers for a Manhattan apartment and a Palm Beach, Fla., estate once owned by the financier-turned-felon.

In estimates federal regulators filed last year, Madoff himself valued his Manhattan apartment at $7 million and the Florida property at $11 million. He said the Montauk beach house, which he bought in 1979, was worth $3 million.

The Marshals Service announced Tuesday that the Corcoran Group will list the beach property at $8.75 million. Whether Madoff’s notoriety hurts or helps remains to be seen.

“Our goal is to place the homes on the market soon to minimize the amount of time they remain in our inventory and maximize the return to the victims,” U.S. Marshal Joseph R. Guccione said in a statement Monday.

Madoff, 71, was sentenced in June to 150 years in prison for orchestrating a massive Ponzi scheme that spanned decades and spun a web of phantom wealth.

Thousands of investors with Madoff’s once-respected advisory firm believed their securities accounts were worth tens of billions of dollars. But investigators say the totals on the clients’ monthly account statements were fiction. In reality, Madoff never made investments and instead siphoned new investors’ money to pay returns to existing ones – and to fuel a life of luxury.

Madoff’s punishment included a forfeiture order that stripped him and his wife, Ruth, of nearly all their wealth. The order gave the marshals authority to seize and sell the homes.

Deputy U.S. Marshal Roland Ubaldo said furniture and any other personal belongings found inside will be sold at auction, “from pieces of art to Ruth Madoff’s shoes.”

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