Ruth Madoff took $2m from London office before collapse

Serious Fraud Office investigates UK arm of Madoff's business

Ruth Madoff, the wife of Wall Street swindler Bernard Madoff, received $2m (£1.4m) in payments from the family's London business less than a month before his arrest, further drawing her finances into criminal investigations on both sides of the Atlantic.

The Serious Fraud Office in the UK yesterday characterised Madoff's London operation as "a cog in the giant washing machine", as it set out new details of how the former Nasdaq chairman ran his $65bn Ponzi scheme.

The SFO and the FBI in New York are each investigating who else might have known about Mr Madoff's illegal activities, which stretch back at least to the early 1990s. Mr Madoff claims he acted alone, and his wife has not been charged with any wrongdoing.

The $2m transfer to Mrs Madoff personally in late November was revealed yesterday by the SFO's Madoff case manager, Glyn Powell, in an update on the investigation.

At that time, her husband had been desperately seeking money to shore up his scheme. For decades, while pretending to be investing in the stock market, Mr Madoff had in fact been paying clients with the fresh money coming in from new investors. The scheme began collapsing last autumn as the new money dried up.

It emerged last month that Mrs Madoff also withdrew $5.5m from a brokerage account in the US at about the same time, and then took out another $10m on 10 December – the very day her husband made his confession.

Prosecutors in the US are seeking to seize property, including the couple's Manhattan penthouse and three other homes, which is held largely in Mrs Madoff's name. Mr Madoff, 70, was remanded in custody after pleading guilty to 11 charges earlier this month. Three counts of money laundering refer to the transatlantic transfers made between Madoff Investment Securities in New York and Madoff Securities International in London, which investigators believe were made to create the illusion of genuine investment activity and to boost profits at the share-trading arm of his business.

"MSI UK played a significant role in the operation of Bernard Madoff's investment fraud," Mr Powell said yesterday. "It was a cog in the giant washing machine."

MSI claimed to be a legitimate business set up just to invest the Madoffs' own money. Its offices were in the Mayfair area of London, which is home to many hedge funds, and its traders were monitored by CCTV by Mr Madoff from New York. The investigation by the SFO is examining whether anyone in the London office knew, or should have known, that the Madoff enterprise was a fraud. Its officers say that there are still many unanswered questions but that their work is making fast progress and they expect that any charges will be filed before the end of this year.

To date, the only other person to have been charged anywhere in the world in connection with Mr Madoff's fraud is his auditor, David Friehling, who was freed on bail in New York earlier this month. Mr Friehling was paid up to $14,000 a month by Madoff, but only "pretended" to audit his business, according to legal filings.

Mrs Madoff agreed to a freeze on her assets when her husband was bailed. She has hired a separate lawyer to represent her, since she is a party to numerous lawsuits from aggrieved investors.

Mr Madoff's fraud is the largest in Wall Street's history, hitting 4,800 clients, including charities and Hollywood celebrities. It has humiliated the SEC, which repeatedly investigated fraud allegations against Madoff yet failed to uncover the fraud.

News
people'It can last and it's terrifying'
Sport
Danny Welbeck's Manchester United future is in doubt
footballGunners confirm signing from Manchester United
Sport
footballStriker has moved on loan for the remainder of the season
Sport
footballFeaturing Bart Simpson
PROMOTED VIDEO
New Articles
Olivia Colman topped the list of the 30 most influential females in broadcasting
tv
News
Kelly Brook
peopleA spokesperson said the support group was 'extremely disappointed'
News
The five geckos were launched into space to find out about the effects of weightlessness on the creatures’ sex lives
i100
Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
Sport
Andy Murray celebrates a shot while playing Jo-Wilfried Tsonga
TennisWin sets up blockbuster US Open quarter-final against Djokovic
Arts and Entertainment
Hare’s a riddle: Kit Williams with the treasure linked to Masquerade
booksRiddling trilogy could net you $3m
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
News
ebooksAn unforgettable anthology of contemporary reportage
News
news Video - hailed as 'most original' since Benedict Cumberbatch's
News
i100
Life and Style
The longer David Sedaris had his Fitbit, the further afield his walks took him through the West Sussex countryside
lifeDavid Sedaris: What I learnt from my fitness tracker about the world
Arts and Entertainment
Word master: Self holds up a copy of his novel ‘Umbrella’
booksUnlike 'talented mediocrity' George Orwell, you must approach this writer dictionary in hand
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Implementation Consultant (VB,C#, SQL, Java, Eclipse, integ

£40000 - £50000 per annum + benefits+bonus+package: Harrington Starr: SQL Impl...

Head of IT (Windows, Server, VMware, SAN, Fidessa, Equities)

£85000 per annum: Harrington Starr: Head of IT (Windows, Server, VMware, SAN, ...

Technical Software Consultant (Excel, VBA, SQL, JAVA, Oracle)

£40000 - £50000 per annum: Harrington Starr: You will not be expected to hav...

SQL DBA/Developer

£500 per day: Harrington Starr: SQL DBA/Developer SQL, C#, VBA, Data Warehousi...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering