Madoff Victims Want Answers, Not Apologies

CBS Evening News: How Much Money Does He Have, And How And When Is It Going To Be Paid Out?

(CBS)  Lawyers for jailed swindler Bernard Madoff will be in court again next week, this time to argue Madoff be freed on bail until his sentencing.

But what's of more interest to investors is if they'll ever see any of their money again, as CBS News correspondent Priya David reports.

In court this week, a subdued Madoff said he was "deeply sorry and ashamed" for cheating investors in a two decade long Ponzi scheme. But those words that mean little to clients burned by Madoff who want answers, not apologies.

"He's refusing to identify where the assets or who his co-conspirators are," said Brad Friedman, and attorney representing Madoff Investors.

A court document filed Friday shows Madoff and his wife had almost $1 billion in personal wealth at the end of last year. His ownership of the business was by far the biggest chunk - $700 million. They had $45 million in stocks and bonds and $17 million in cash in the bank, plus homes in New York, Florida, and France worth $22 million. Throw in a $12 million partial ownership of a jet and boats worth about $9 million for a total of at least $823 million.

"There's gonna be a whole lot of forfeiture," said former federal prosecutor Victoria Toesing. "Madoff is going to have to give up anything that is related to his crime."

But all those assets add up to a small fraction of what Madoff took from clients - perhaps $20 billion, investigators now say. (On paper, Madoff fictitiously grew that money to $65 billion.)

Defrauded clients are starting to see a trickle of reimbursement from the Securities Investor Protection Corporation, a non-profit set up by brokerages for cases of fraud. The insurance fund pays up to $500,000 per account. So far, the SIPC has dispersed $6 million dollars to 12 investors. But president Stephen Harbeck says there are more than 5,000 claims.

"The victims here do have different agendas. People who gave money to the Madoff brokerage firm late in the day want us to use the real actual dollars put in minus real dollars put out," Harbeck said. "I can understand why people who have been in this scheme for a long time would prefer us to use the fictitious figures that Mr. Madoff was giving them, but that's not the way the law works."

Many victims like Bert Ross paid taxes on those fictitious earnings. Ross says he lost $5 million to Madoff, plus another $375,000 in taxes.

"Taxes on income I thought I had, which I never earned, because we never took money out. So that's phantom income. That money should be returned to us," Ross said.

Those victims may be in luck. According to a federal theft loss law, you could be eligible for a tax refund if you've lost money over the past three years because of fraud.

On the other hand, even if you got your money out before the Madoff scheme collapsed, you may be sued for making a profit.

It's called a clawback. The idea behind it is that everyone is a victim, and that some people shouldn't benefit because they got some of their money out early. Instead, the money should be returned and distributed fairly among everyone. But that could mean even more people could feel victimized because they're being sued to give money back.

[dthochst]

What is happening to Americans? Everyone expects a handout from the government these days. Where has personal resposibility gone? Do you Madoff fools know what would happen if the goverment bailed you out? Anyone who has ever lost any kind of money would be lining up at the government's door asking for their money back. If you are not smart enough to thoroughly check out your investment then you are not smart enough to realize the damage that would happen to the already beat down economy if our tax money bailed you out.

[sndkzyaa]

I'm trying to remember something.

How many major financial crooks actually were caught and prosecuted during the Clinton years?

[sndkzyaa]

The SEC was warned dozens of times about Madoff from 2001 - 2005, and your only concern is the ONE TIME they were warned about him in 2000?
Posted by hungry1968-15 at 5:41 AM : Mar 15, 2009

So are you saying we should just IGNORE the fact that Madoff was delivered on a sliver platter, mathematical proof and all, to the Clinton admin in 2000, and the Clinton admin did nothing?

Are you denying that Clinton dropped the ball?

If the Clinton admin had done its job, Madoff would have gone to the slammer eight years ago.

That is, if there was any room after locking up all the crooks from Enron, Worldcomm, Andersen Accounting, and all the other accounting fraud that was running rampant during the Clinton years.

[sndkzyaa]

why havent you people run Phill Gramm the hell out of the state of Texas you people are from the old west hell old Bob steel would have kicked his A-S-S
Posted by aheadace at 5:34 PM : Mar 15, 2009

Phil Gramm deserves to spend 20 years locked in the same solitary confinement cell with Barney Frank.

Those two just seem to be made for each other...

[summarex]

Most of Madoff's victims are those nice people who bank roll AIPAC and visciously attack anyone who dares to question the actions of Israel. Then they go off and celebrate the murder of Iraqis and Palestinian teenagers. I just don't feel sorry for these nasty bastards.

[republic1776]

rnbwprsm01,
You are A federal Agent flagging this blog for key words.
A terrost sending a message.
Or a freakin nutjob

[sndkzyaa]

Madoff scammed all through the Clinton years, then he was turned in on a silver platter to the SEC in 2000. The SEC did nothing.
Posted by sndkzyaa at 5:43 PM : Mar 15, 2009

Also, remember that Madoff was a major contributor to Democrat causes, including the campaign of Hillary Clinon.

And the Clinton admin let him walk when he was reported in 2000 by a whistleblower who proved mathematically that he was committing fraud.

[sndkzyaa]

The SEC was warned dozens of times about Madoff from 2001 - 2005, and your only concern is the ONE TIME they were warned about him in 2000?
Posted by hungry1968-15 at 5:41 AM : Mar 15, 2009

Because of DOUBLE JEOPARDY, the first time is the ONLY time that counts.

Bush's hands were tied. He couldn't touch Madoff because of double jeopardy.

You can't be charged for the same crime twice. Madoff was reported for this scam in 2000.

The Clinon admin took no action. That made Madoff immune to those charges.

Madoff fits the consistent pattern that has emerged from the Clinton administration.

The FBI sent undercover agents to flying schools when the 9/11 pilots were engaging in suspicious behavior. They found nothing.

Enron, Worldcomm, Andersen Accounting, and the other Clinton era scams were going on right under Clinton?s nose. But the Clinton admin saw nothing.

One of the 9/11 pilots was turned in five times to the FAA. The FAA did nothing.

Madoff scammed all through the Clinton years, then he was turned in on a silver platter to the SEC in 2000. The SEC did nothing.

The Clinton admin was characterized by ineptness, neglect, and inaction. But they accuse Bush of inaction before 9/11.

Remind me again. Why did they call him Slick Willy?

[sndkzyaa]

Clinton?--he was pretty much a Repig himself. NO way was the author of NAFTA and H1B visas a friend of American labor.

So if your retirement is gone--thank the "deregulation Repigs". It's that simple.
Posted by johnb8888 at 6:10 AM : Mar 15, 2009

HA HA HA HA!!!! Now THAT'S some fresh material.

Sure if you count Clinton as a "Repig," then it IS all the "Repigs'" fault.

As long as Clinton is the ONLY REPIG then I totally agree with you.

[sndkzyaa]

"I don't see that signing that bill had anything to do with the current crisis. Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merril Lynch by Bank of America, which was much smoother than it would have been if I hadn't signed that bill... On the Glass-Steagall thing, like I said, if you could demonstrate to me that it was a mistake, I'd be glad to look at the evidence."
It is amazing how you libs continue to deny ...
Posted by janem4 at 11:52 AM : Mar 15, 2009

Remember how the lieberals told us Clinton was forced against his will to sign the GLB bill because it was "veto proof?"

LOL! Does the above quote sound like Clinton thought it was "veto proof???"

[BigEasyNative]

The GREEDY and believers in NANNY Government got what they bought: a big NOTHING.

Bernie you are the Man!

[edward1975-2009]

Investors surely wouldn't be asking questions if they all made millions. You got taken by a con-man, you let greed drive you to blindness and stupidity. Now, you got anymore questions. That was easy.

[curse914]

If I steel a TV from Jim who lives across the street from me and give it to Bob who lives next door I will get in trouble for theft. Bob did not do anything wrong. Does he get to keep the TV?

Posted by jscUS at 7:49 AM : Mar 15, 2009

No, it is stolen property and would be returned to the proper owner. The clawback law works in a similar way to divide money up in way that redistributes total money invested.

[chonder2]

My problem is NOT with the republican party. It is with the High Priest Of Deregulation. Yes Clinton did sign the bill containing the Gramm-Leach-Bliley Act 1999. But Gramm as long as he has been in the public office has railed about zero regulations, let the market go policy. He got what he wanted. His recent " mental recession" and " nation of whiners "comments , and " WHAT RECESSION"? " No problem with the economy" he advised John McCain to say is enough.That bumper sticker is correct MADOFF/GRAMM should be together in 2010.

[dan70sully]

People starting to cash in on Madoff- $500,000.00 bernard madoff inmate # 61727-054 for sale on ebay.com

auction the link;

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&ssPageName=STRK:MESELX:IT&item=180336700171

[thetireguy1]

response to tmittelstaed, I not stupid paying 7% on a home mortgage, or 18% on a credit card
I was just showing a random basis while they(madoff investors) were receiving 10%
on their money while I (most americans) like me had to pay higher rates to keep up with the jones and they(madoff investors) during the past 10-20 years and now think that we
(american taxpayers) should bail them out!
If you think you can go to a bank and re-finance to 4.5% you should try it, the banks aren't lending out its all on hold! My rates are 5.25 and I'm happy with that rate, so please respond
to the madoff investors who are stupid and don't call someone who you don't know stupid!
If you had my money you would throw yours away!!!!!!!!!!!!!!!!!!!!

Can we get our money back from losses sustained by our 401k plans....I think not, so why should rich folks who should have known better and just wanted to get richer circumventing normal banks to just get regular interest rates get theirs back??? Too freakin' bad...I feel so bad for them and now even they know "trickle-down" economics doesn't work! LOL

[perk235]

You have to go back to the begining. That means draging Phill Gramm back to Washington to testify on how HIS absolutely NO REGULATION policies are working out. The Gramm-Leach-Bliley Act in 1999, the Commodity Futures Act Of 2000. He is now a UBS vice chairman. UBS is being sued for helping investors duck the IRS laws. His wife was an ENRON board member while they ran it into the ground and left investors and employees broken.
Posted by chonder2 at 7:43 AM : Mar 15, 2009
---------------------------------------------

Yes, Phil Gram has given us a texas-sized recession. The Glass/Steagall Act of 1934 was gutted by the Gramm/Leach/Bliley Act.

The Commodities Modernization Act deregulated energy and derivatives. It has given us ENRON, which was just a foreshadowing of AIG, JP Morgan, Citibank, Bank of America and now credit default swaps of GE's financial arm.

[ariz_1944]

I am SO glad to see this scab in jail. However, I believe he should be stripped of ALL his money, homes, cars, art, ALL HIS FUNDS! Then he should be dumped with the homeless in lower NY, or LA. and let him live off the street! IF he ever got a job, ALL his pay should be taken, and returned to the thousands of investors that trusted this piece of CRAP!

[AZBryant]

Did anyone in Madoff's organization even have a Series 7 securities license? I haven't read of anyone being a licensed broker...could be why there's no record of any trades being made...just a thought......