The New York Law Journal reported today that in a letter Ira Lee Sorkin wrote to U.S. District Court Judges Denny Chin and Louis Stanton, and U.S. Bankruptcy Judge Burton Lifland, Bernie Madoff's lead attorney said that he had spoken to Ruth Madoff's lawyer Peter Chavkin and , "we agree that Mrs. Madoff owns certain assets...free and clear of any wrongdoing by Mr. Madoff, or to which she had a legitimate untainted property interest."

We asked the U.S. Attorney for the Southern District of New York if he agreed with Sorkin's claim concerning Ruth Madoff's assets. The U.S. Attorney refused to comment on this question as well as to the question we posed that if Mrs. Madoff does not own "certain assets" why then has the government not seized the Madoff's Manhattan apartment.

The U.S. Attorney notwithstanding, are there any victims of the Bernard Madoff's criminal enterprise who could possibly believe that the assets owned by Ruth Madoff were accumulated with funds not associated with the Ponzi scheme? 

In an effort to determine whether Ruth Madoff made a false statement when she applied for Florida voter registration on November 13, 2006--a third degree felony punishable by up to five years in prison and up to a $5,000 fine--we have sent the following e-mail to Florida's Attorney General, Bill McCollum:

Dear Mr. Attorney General,

We are the authors of Catastrophe:The Story of Bernard L. Madoff The Man Who Swindled The World, published in March 2009 by Phoenix Books. We are continuing to follow developments by blogging on our website, www.madoffbreakingnews.com

We are writing at this time to request that you investigate the likelihood that Ruth Madoff made a false declaration on November 13, 2006, when in filing an application for Florida voter registration she listed her Palm Beach property as her legal address.

In fact, the Palm Beach County Property Appraiser denied her application for Florida Homestead Exemption in 2007 on the ground that she was then participating in the New York STAR program, requiring one to maintain a legal address in New York-a decision she appealed and that was denied at that time.

As the Palm Beach County Property Appraiser's website states: "To qualify for Florida's Homestead Exemption tax-saving benefit, the property must be the owner's primary residence, must be a permant resident of Florida and cannot hold any residency based benefits in other Florida counties or states."

Thus, as Madoff was deemed not to have been a legal resident of Florida in 2007, she could hardly have had a legal residence in the state on November 13, 2006, when she was still participating in New York's STAR program.

Should your investigation find that Ruth Madoff did make a false statement on her Florida voter registration application, please let us know whether you intend to file charges related to this third degree felony.

Sincerely yours,

 Deborah Hart Strober                Gerald Strober 

When last Thursday federal marshals seized the 8700 square-foot Palm Beach mansion owned by Ruth Madoff since 1994, most media attention was focused on the question of whether the government had the right to take over the property, as her application for Florida Homestead Exemption had been granted on January 12, 2009.

In order to clarify the situation, the Palm Beach Property Appraiser's office posted a note on its website stating that: "A Florida Homestead exemption does not mean a property is exempt from any court-ordered judgment related to a homestead property in Florida. Florida's Homestead Exemption does not guarantee a property cannot be seized in a criminal or civil court ordered judgment."

What the media did not focus on--and what Madoff Breaking News.com is reporting as an exclusive--is the likelihood that Ruth Madoff falsely swore when on November 13, 2006, she applied to register to vote in the state of Florida.

In order to qualify for Florida voter registration, she would have had to have listed her home at 410 N. Lake Way in Palm Beach, as her legal address. In 2007, when she first applied for Florida Homestead Exemption, however, her application and subsequent appeal were denied.

Why?

The Florida authorities must have determined that Ruth Madoff, for the purposes of participation in the New York STAR program, had, as required by New York law for STAR eligibility, listed her Manhattan apartment as her primary residence. As the Palm Beach County Property Appraiser's website states: " To qualify for Florida's Homestead Exemption tax-saving benefit, the property must be the owner's primary residence, must be a permanent resident of Florida, and cannot hold any residency based benefits in other Florida counties or states."

If, as seems likely, that Ruth Madoff did file a false oath in applying to vote in Florida--a third class felony in that state--she would be subject to up to five years in prison as well as up to a $5,000 fine, small potatoes, perhaps for her. That is, if federal prosecutors in New York's Southern District conclude that she participated in history's greatest Ponzi scheme ever.

Ruth Madoff's timing in trying to construct a legal identity in Florida as early as November 2006 and applying for Florida Homestead status in 2007, at least a year before the fraud unraveled, suggests that the Madoffs may have been hedging their bets on the future by creating a fail-safe situation wherein if they lost most assets, they would still retain their home in Florida.

It that was their reasoning, they received poor legal advice concerning that state's homestead provisions.

 But then, it is our contention that Bernie has already paid the price of having received flawed legal advice, and on a far weightier matter, namely pleading guilty and going directly to jail.

When Ike Sorkin left the Daniel Patrick Moynihan United States Courthouse last Thursday following his failed attempt to spring Bernie Madoff from the Metropolitan Correctional Center, he was hounded by photographers, reporters, and, of course, your Catastrophe bloggers.

Refusing to indulge in the predilection of such publications as the New York Times and the New York Law Journal to portray the silver-haired, perpetually rumpled Ike as the second coming of Clarence Darrow, Deborah shouted the first question--we like to be first whether turning out books or grilling lead defense attorneys--as to whether if he lost in the Court of Appeals Bernie Madoff's lead attorney would be taking the issue to the U.S. Supreme Court.

Responding with a quip, he said " I'm heading for the State Supreme Court," meaning just across the street, right here in New York City.

Was Ike going over there to represent another white collar criminal? Or was he on his way to a hearing concerning the malpractice suit brought against him by a disgruntled former client--a development we were the first to divulge on this website.

We also wondered: Why did Bernie Madoff plead guilty to eleven felony counts on the fateful morning of March 12, rather than taking his chances with a jury up the road and thus remaining in his penthouse for a while?

While the government continues to insist that there was no deal with Bernie, we believe otherwise.

Consider this: In our last blog, Deborah wrote of Ruth's possible role in her hubby's decision to plead, thus assuring the immediate revocation of his bail. Was Bernie pressured by her to give up the comforts of home--albeit temporary--to ensure that she wouldn't be prosecuted as his accomplice in crime?

Time will tell.

Now, as Ike made his escape from the pursuing media, it was my turn to shout out: Had he bothered to inform Bernie of how Alberto Vilar, a convicted swindler whose case has been described by the U.S. Attorney as "strikingly similar" to his, by opting to go on trial, had been able to remain at home for more than three years?

Taken by surprise at the mention of Vilar, Ike paused momentarily. Then, recovering and reverting to his customary nonchalance, he retorted with his customary "No comment" and went on his way.

Shouldn't Ike have told Bernie how Vilar, arrested on May 26, 2005; indicted thirteen days later on twelve felony counts, including conspiracy, securities fraud, mail fraud and wire fraud; held following his arrest at the Metropolitan Correctional Center for about one month and then released on bail, was able to enjoy the comforts of his luxurious apartment at United Nations Plaza for so long, even during his nine-week trial?

Having been found guilty on all counts on November 19, 2008, Vilar was remanded a month later to the MCC.

Have he and Bernie met there? If so, has the Ponzi King learned from Vilar, and not Ike Sorkin, of the temporary rewards of not being so quick to plead?

If the Government is telling the truth--usually an iffy proposition--that there is no plea agreement with Bernie, why ever did he trade the luxuries of home, not to mention Ruth's homecooking, for the Spartan digs of the MCC?

 That brings us back to our initial question: What incentive did Bernie have in pleading guilty on March 12?

We will continue to question Ike by e-mail as to Bernie's motivation in doing so and as to whether pressure by Ruth figured into his decision to forsake bail and go directly to jail.

Don't hold your breath, though, unless you are able to read something into Ike's "No comments."

We can't get through a media appearance these days without being asked: Is Bernard Madoff really evil?

While we certainly do not sit in judicial or moral judgment upon Madoff, we do believe that the longevity of his criminality marks him as being so.

How else can one characterize a person who shamelessly stole from so many investors, knowing that his thievery would devastate their lives?

Last Friday, during a taping session for WABC-TV's Sunday program "Upclose with Diana Williams," we met Ronnie Sue Ambrosino one of the victims we interviewed by telephone for our Madoff book, and her husband Dominic, who are dealing with the devastation of their own lives by offering support to other victims, while salvaging what they can of their former affluence and sense of emotional well-being.

We have known another of our interviewees, Robert Lappin, for many years. An honorable man, he in 1982, financially facilitated the sending of fifty-five American Christian clergymen to Israel and Lebanon for an eye-witness examination of Israel's efforts to rid Lebanon of the plague of PLO domination. And more recently, he has sent many young people to Israel in search of a meaningful educational experience.

Another acquaintance of many years' standing whose personal and foundation funds were stolen by Bernard Madoff is Holocaust survivor, writer and human rights campaigner Elie Wiesel.

Now we learn that Madoff stooped so low as to steal the retirement funds of Rabbi Alexander Schindler, of blessed memory, husband to his beloved Rhea, father of five, and adored grandfather.

We knew Rabbi Schindler--I served for nine years as a member of the Zionist General Council while Rabbi Schindler served on the board of governors of the Jewish Agency for Israel--and Deborah and I applauded his courageous stands on issues such as civil and women's rights; advocacy for the handicapped; and recognition of Jewish identity through patrilineal descent.

We also recall Rabbi Schindler's courage when in 1977, while chairman of the Conference of Presidents of Major American Jewish Organizations, he traveled to Israel immediately following elections there to assure the new, democratically elected prime minister, Menachem Begin, of the organized American Jewish community's support in the face of a fierce media onslaught.

During my service on the Zionist General Council I had the opportunity three times each year to serve on committees with the rabbi and to witness his intelligence, wisdom and all encompassing love for Israel and the Jewish people.

Bernard Madoff was knowledgable about and involved in the American Jewish community--he served on the board of Yeshiva University--and was surely aware of Rabbi Schindler's lifelong service to the Jewish people.

Yet he stole from this noble Jew, an escapee from the Nazi Holocaust. Arriving with his parents in New York from Munich in 1937, the young Schindler served as an alpine trooper in World War II, earning both a Bronze Star and a Purple Heart. Becoming a congregational rabbi, he was later elected president of the Union of Amercan Hebrew Congregations [UAHC]where he served with great distinction for more than twenty years.

Now, as a result of economic terrorist Bernard Madoff's treachery, Rhea, in order to make ends meet, is forced to sell their home in Connecticut, as well as two rare pieces of Judaica presented to Rabbi Schindler on his retirement from the UAHC.

Can anyone doubt that the man who stole from Alexander Schindler, and so many others, is evil?

• U.S. Attorney for Southern District of New York Press Release dated 3/10/09 "Bernard L. Madoff Charged In Eleven-Count Criminal Information"
• U.S. v. Bernard Madoff Charges dated 3/10/09
• Letter from Acting U.S. Attorney for the Southern District of New York dated 3/10/09 to Ira Lee Sorkin regarding [count by count] the "present position of the U.S. Attorney for the Southern District of New York regarding the application of the U.S., Sentencing Guidelines to this case."

As a friend of ours, a lawyer, advised us years ago regarding the criminal justice system, "Don't ever be a victim."

Consider the following:

Last evening, it was announced that Bernard Madoff will appear in the U.S. District Court in Manhattan on Thursday, March 12, at 10:00 a.m., where he is expected to plead guilty to federal charges related to his $50 billion Ponzi scheme.

According to an order signed by U.S. District Court Judge Denny Chin, "The court will rule on whether, and the manner in which, victims may be heard at the proceeding." The Ponzi King's victims have until 10:00 a.m. on Wednesday the 11th to e-mail requests to be heard at the hearing, hardly a magnanimous gesture on Chin's part as under federal law victims have the right to be heard at any hearing concerning a defendant's plea proceeding. [The Crime Victims' Rights Act of 2004; 18 U.S.C. 3771]

We are troubled by the time frame imposed by Judge Chin for victims to make known their interest in being present when Madoff appears in court. Further, as Chin suggests that he that he will not decide until Wednesday whether any of those individuals will be allowed to speak, if he does comply with federal law we wonder: in what manner will their presentations be made?

Please note that:

The order was issued on a Friday evening; it does not guarantee any of Madoff's victims their rights under the Victims' Rights act; and Judge Chin has given Madoff's victims less than five days--two of them weekend days--to decide whether to apply to be heard in his courtroom.

As many of Madoff's victims reside hundreds, if not thousands, of miles away from Manhattan's Foley Square, we wonder: how will many of the newly impoverished among them-those who can offer the most compelling testimony as to why Madoff deserves major prison time--be able to pay for airline tickets absent the benefit of seven-day advance purchase plans? And how will they be able to arrange for reasonably-priced hotel accomodations on such short notice?

Why must Judge Chin be so hasty in holding this crucial hearing on March 12?

Could he not have waited a week?

Shouldn't Bernard Madoff's victims view the judge's actions as being but the latest instance of the favoritism shown him by the Southern District court that began with his original bail arrangement?

And isn't Ira Sorkin, formerly an SEC official and a former assistant U.S. attorney in the office now prosecuting Madoff, once again succeeding in playing the system for all its worth? 

We are checking our e-mails day and night--but not holding our breaths for--Baker & Hostetler partner Richard Bernard's response to our query of February 17.

Yesterday, seeking clarification concerning yet another issue, namely the hiring of law firms in Ireland, and the United Kingdom to assist Baker & Hostetler in its role as counsel to Irving Picard, the court-appointed Madoff bankruptcy trustee, we e-mailed David Sheehan, another of the firm's partners involved in the Madoff case as one of Picard's counsels.

We are advised by attorneys familiar with bankruptcy proceedings that it is common practice for law firms serving as trustees' counsels to retain additional firms to deal with specific aspects of those cases.

Given that the Madoff case is highly unusual, however, we sought clarification from partners of the firms thus far retained by Baker & Hostetler concerning the process by which the above-mentioned firms were retained.

Thus we put in a call to David Cantrell, the managing partner of Eugene F. Collins Solicitors, a firm in Dublin, Ireland, dealing with at least three Madoff-related cases, leaving an explicit message.

We're still awaiting his reply.

We also called Robin Keller, a New York-based partner at Lovells LLP, the firm hired by Baker & Hostetler to handle cases in the United Kingdom and on the European continent. When informed as to why we were calling, she replied that another of her firm's attorneys would be in touch with us.

We're still awaiting that attorney's reply.

In our e-mail to David Sheehan we inquired about the process by which Baker & Hostetler had retained Eugene F. Collins Solicitors and Lovells: Had competitive bidding been involved? Did either firm have a prior professional relationship with Picard and/or Baker & Hostetler?

We're still awaiting his reply too.

Oh, and we copied Kevin McCue, Baker & Hostetler's spokesperson for the Madoff account.

But it's downright Kafkaesque: Keven McCue does not answer the telephone number to which media calls are directed, instructing the caller instead, via voice mail message, to e-mail him.

Needless to say, we're still awaiting Kevin McCue's return e-mail.

To those in the legal profession such evasion may be commonplace. To us and, very likely, to many of Bernie Madoff's victims, the attorneys' wall of silence is quite disturbing.

This is hardly your typical bankruptcy case. The predicted "substantial to very substantial" monies [according to a bankruptcy expert] to be paid Picard and Baker & Hostetler, as well as the hourly remuneration to Eugene F. Collins--$575 per hour for partners, representing a ten percent discount from the firm's normal rate--and Lovells--$875 per hour for partners for work in the U.K. and $640 per hour for work in Europe--will come out of the victims' pockets via funds already secured or to be recovered by Picard from Madoff's criminal enterprise.

Surely Bernard Madoff's many victims deserve answers to the questions we have posed to the various attorneys and to Baker & Hostetler's elusive spokesperson. And they also have the need to be assured that those retained are the ones best eqipped to deal with the enormous complexities of the Madoff case, as well as to zealously protect their interests.

We fear, however, that the United States Bankruptcy Court for the Southern District of New York; trustee Irving Picard; and Baker & Hostetler, his counsel, see this case as just business as usual and do not seem to grasp that Bernard Madoff's victims, as well as the concerned public, have the right to, deserve and cry out for total disclosure.  

On February 16, we emailed George Stamboulidis, the managing parter of Baker and Hostetler's New York office, reiterating our question of February 11: Did he or anyone else at the firm know prior to December 15, when Irving Picard became the court appointed trustee for BMIS, that he was planning to leave the Gibbons firm for a partnership at Baker & Hostetler?

While Mr. Stamboulidis has not responded to either of our emails, on December 22, the day Mr. Picard joined Baker & Hostetler, he issued a statement that "Irving's depth of knowledge in complicated restructurings and experience as a trustee in major security cases is widely recognized."

On that day, Mr. Stamboulidis was likely savoring Baker & Hostetler's coup in obtaining control over the Madoff bankruptcy, along with the dividend of its power to grant assignments to other law firms and financial asset management companies.

Regarding monetary remuneration sought by Mr. Picard, on February 17, we emailed Richard Bernard, one of the two Baker partners who filed a motion with the U.S. Bankruptcy Court for the Southern District of New York: Could he estimate the likely monthly fee due Mr. Picard? And, as Mr. Picard is now a partner at Baker & Hostetler, would said fee be paid to that firm? Let us also remember that as Mr. Picard's counsel, Baker will receive a separate fee for its Madoff related work.

It's now Friday, February 20, and we're still waiting for Mr. Bernard's response.

As lay people, we have been trying to understand some of the legal aspects of the Madoff case. For example, on December 15, 2008, U.S. District Court Judge Louis Stanton appointed Irving Picard, a highly experienced bankruptcy attorney, with the Gibbons law firm, as trustee for BMIS.

In that order, the judge named the firm of Baker & Hostetler to serve as Mr. Picard's counsel. Then exactly one week later, on December 22, Mr. Picard became a partner at Baker & Hostetler.

Why, we wondered, would Judge Stanton not simply have appointed Gibbons as the trustee's counsel, given that on the day of his appointment Mr. Picard was presumably employed by that firm?

Seeking an answer, we spoke on the telephone with John J. Gibbons. While Judge Gibbons would not comment on Mr. Picard's departure, he did state that his firm is fully capable of acting as counsel to the bankruptcy trustee and indeed, has significant experience in such matters.

After researching the matter further and discovering that it is not uncommon for a bankruptcy trustee to request that his own law firm be appointed to serve as his counsel, we wondered: did Mr. Picard, if he requested that Judge Stanton name Baker & Hostetler, know on December 15, 2008, that he would be leaving Gibbons to join that firm?

In considering this issue, it should be pointed out that both the trustee and his counsel are entitled to compensation for their efforts. Thus, only days ago, Baker & Hostetler filed a motion with the U.S. Bankruptcy Court for the Southern District of New York requesting that Judge Burton R. Lifland determine their, and Mr. Picard's compensation.

On February 11, we emailed Mr. Picard asking if he had requested that the court appoint Baker & Hostetler as his counsel. That same day we emailed Mr. George Stamboulidis, the managing partner of Baker's New York office asking if he was aware on December 15, that Mr. Picard would leave his position at Gibbons and join Baker. As of today, at 4:00 P.M., we have had no response to either email.

More on this tomorrow.