Judge Approves Madoff Cash Infusion

SEC Deadline Looms As Bankruptcy Plays Out In Court And Congress Holds Hearing; Statue Stolen From Fla. Estate

(CBS/AP)  A U.S. Bankruptcy Court judge on Tuesday approved the transfer of $28.1 million to cover expenses tied to the liquidation of Bernard Madoff's investment firm.

Madoff is accused of running an elaborate %t that duped investors ranging from individuals to charities to large banks out of potentially $50 billion.

Irving Picard, the trustee presiding over the liquidation of Madoff's investment firm, said he needed the $28.1 million to cover employee salaries and other costs, according to court documents. Bank of New York Mellon Corp. previously agreed to transfer the funds, but Bankruptcy Judge Burton Lifland first had to approve the transfer.

Richard Bernard, a lawyer with Baker Hostetler who was representing Picard at the hearing, said the transferred funds will not affect any recovery for investors. The funds are being transferred from one account that had already been frozen. Lawyers continue to investigate if Madoff had any other accounts that have not yet been frozen, Bernard added.

BNY Mellon already transferred about $883,000 to cover costs tied to the liquidation.

Picard will oversee the liquidation of assets from Madoff's investment firm as the Securities Investor Protection Corp. attempts to help investors recoup their money. SIPC was created by Congress in 1970 to protect investors when a brokerage firm fails and cash and securities are missing from accounts. Funds can be used to satisfy the remaining claims of each customer up to a maximum of $500,000. The figure includes a maximum of up to $100,000 on claims for cash.

"What we are seeing is the very start of the civil process that may or may not allow some Madoff investors to get some, a small portion, of their money back," says CBS News Legal Analyst Andrew Cohen. "But there are so many moving parts, and so many different players, that it's going to take years not months for it all to unfold.

"This has nothing to do with the pending criminal case against Madoff and everything to do with setting up the rules going forward in the civil case for money damages to investors who gave him their money and trust. It's the start of a very complex case."

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Follow the Madoff Money Trail
A look at the people and institutions that have lost millions in the alleged Bernie Madoff Ponzi scheme.

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Meanwhile, Palm Beach police are investigating the disappearance of a $10,000 copper sculpture of two seated lifeguards from Madoff's Florida estate.

Palm Beach police spokeswoman Janet Kinsella said Tuesday that a housekeeper reported the statue missing on Dec. 22. %t, where he was a part-time resident at his posh $9.4 million estate.

Madoff faces a Wednesday deadline to provide the Securities and Exchange Commission with a written accounting of his assets, liabilities and properties. The report will likely provide insight into how much money investors could recover.

Madoff agreed to list all assets, funds or property he held and the names and locations of entities, bank accounts, brokerage accounts, investments or assets held by his business, Bernard L. Madoff Investment Securities LLC.

On Monday, a judge presiding over civil claims against Madoff said he may be willing to consider extending relief to those who invested in Madoff's business through third parties. To consider allowing investors who invested through third parties to file claims with SIPC, U.S. District Judge Louis L. Stanton said he needs a formal application and briefing from SIPC, the Securities and Exchange Commission, a trustee for Madoff's business and representatives of investors.

A Congressional committee is scheduled to hold a hearing Monday to review whether the SEC had the resources to investigate the alleged fraud by Madoff and determine new safeguards that need to be put in place to help protect investors. The SEC has come under criticism for not fully investigating fraud allegations against Madoff's investment firm. Even SEC Chairman Christopher Cox said there were multiple failures by agency staff in looking into the allegations.

The Congressional hearing is part of the House Financial Services Committee's broader review as it undertakes overhauling financial markets regulation in the coming years amid the ongoing credit and housing crisis.

Madoff, 70, a former Nasdaq stock market chairman, has become one of the most vilified people in America since news broke Dec. 11 that he allegedly had been running a giant Ponzi scheme, paying returns to certain investors out of the principal received from others.

So far, investors have said that they have lost more than $30 billion, according to an Associated Press calculation.

Philanthropic organizations have been hit especially hard, losing a staggering $2.5 billion dollars so far in the Madoff scam, reports CBS News correspondent Jeff Glor.

Reports indicate Madoff was running the alleged scam for decades.

[lordsuntzu]

JESUS H CHRIST!!! we are asking.. HELL WITH THIS MORON..JUST TAKE EVERYTHING......

[hsinco-2009]

Actually, IMO, it was a political failure.

Those de-regulators in Congress and the Bu$h Administration were Madoff''s enablers and the lack of oversight was a political decision (dogma) perpetuated by the Repugs.

I trust no one with my assets. Yes I have some retirement accounts with more money than most Americans but I do not add to those accounts anymore and am pretty much locked into those funds. Much of it is sitting in Money Market funds.

So I buy physical gold and silver and have done pretty well with them (silver is down now but don''t worry about that, when it takes off next time I doubt it will come back down very soon. Unless Obama........). I see the metals as my hedge against my Street based money evaporating.

Thank goodness that Social Security money was allowed to be invested in the Stock Market in Personal Accounts. That would have been another strike against Repug policies.

[mswolfestock]

The greedy S.O.B.

Take everything he''s got, leave him with no more than the clothes on his back, and then dump him out on Wall Street.

They need to make an example out of him for all the rest of the greedy SOB''s that they haven''t caught yet.

[terrapin78]

If this family has $1 after this is all over, then our Justice system has failed.

All and any money that Madoff gave to family, friends, any one, should be confiscated and paid as part of restitution. Kids college funds, 401K''s, Roth IRA''s any investment owned by this entire family (extended too) should be removed from their name.