Bernard Madoff's brother Peter gets access to $10,000 a month for living expenses under an agreement approved Friday in a lawsuit accusing him of swindling a college student.
Peter Madoff was in a Long Island courtroom to appeal a judge's order last week freezing his assets. That order came in a civil lawsuit filed by Andrew Ross Samuels, who claims Madoff took $478,000 of his trust fund and invested it in his brother Bernard's Ponzi scheme.
New York state Supreme Court Judge Stephen Bucaria approved giving Peter Madoff accesss to the money. The pact carries the same terms as a Justice Department document signed by Madoff on Dec. 24, in which he voluntarily agreed not to dispose of his substantial fortune and to curtail his personal spending until further notice.
He is permitted to spend $10,000 a month on living expenses, the judge said.
Madoff arrived late to the courtroom, entering only after the final terms of the deal were negotiated in the judge's chambers about an hour after the proceeding began.
He was briefly required to take the witness stand, where he answered yes in a hushed voice barely above a whisper to a series of questions from the judge.
Bucaria asked both Madoff and Samuels if they understood the terms of the agreement, and whether they were satisfied with the deal.
Terms of the federal agreement were first revealed earlier this week in a separate court proceeding in Brooklyn. The extent of Peter Madoff's holdings are not known; an attorney for Samuels noted that Madoff owns a home in Old Westbury, an exclusive Long Island community, which is valued between $3 million and $5 million.
Bernard Madoff pleaded guilty on March 12 to defrauding investors of billions of dollars in perhaps the largest Ponzi, or pyramid, scheme ever and will be sentenced in June. Peter Madoff was an executive at Bernard L. Madoff Investment Securities. He has not been charged with any crime.
Investors who lost their savings in Bernard Modoff's scam have been urging prosecutors to seek out any Madoff accomplices and seize the assets of any of his relatives who benefited from the crime.
"This is a very small step in trying to get a little bit of justice," said attorney Steven R. Schlesinger, who represents Samuels in the lawsuit. Samuels, 22, a student at Brooklyn Law School, contends his late grandfather invested $478,000 in trust fund money with Peter Madoff. After his grandfather's death in 2003, Samuels claims Madoff then invested the money in his brother's company.
His lawsuit claims Peter Madoff had "full knowledge" his brother was operating "a fraudulent Ponzi scheme and nothing more than an unprecedented fraud."
Samuels spoke briefly to reporters after the proceeding, saying "obviously I feel betrayed."
Madoff and his attorneys left the courthouse without speaking to reporters.
Earlier in the week, a Connecticut judge also froze the assets of Peter Madoff, along with Bernard Madoff's wife, two sons and three investment firms, pending an April 13 hearing that's part of a lawsuit filed by the town of Fairfield, which lost millions to Madoff's Ponzi scheme.
And on Wednesday, federal authorities Bernard Madoff's Palm Beach mansion, his vintage yacht and a smaller boat Wednesday, part of an effort to recoup assets to pay back investors he swindled.
Prosecutors are seizing as much as they can of Bernard Madoff's personal fortune, and have begun demanding millions of dollars in payments from his relatives. Roughly 6,700 people have filed claims for a share of whatever is recovered. Thousands more - some who lost in excess of $1 million - are expected to come forward.
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