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.

Sport
David Moyes and Louis van Gaal
football
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvSeries 5 opening episode attracts lowest ratings since drama began
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
News
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
people
Sport
Greg Dyke insists he will not resign as Football Association chairman after receiving a watch worth more than £16,000 but has called for an end to the culture of gifts being given to football officials
football
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
News
people
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
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

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

COO / Chief Operating Officer

£80 - 100k + Bonus: Guru Careers: A COO / Chief Operating Officer is needed to...

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments