Madoff's Wife, Ruth, is now Sued for $44 Million!
In the almost never ending quest to squeeze blood out of a turnip, the Trustee has sued Madoff's wife in attempt to recover more assets. While I can understand the attempt, and she does have some money, I wonder how far they will get with the theory that she should have known that some of that vast wealth was obtained through fraud. Thanks to the WSJ Law Blog.
The Fed's have apparently already determined that Ruth could not be prosecuted, so the theory must be that even though she didn't have enough knowledge to support a criminal complaint, maybe a jury will give them something. The claim that she should have known that all that money could not have come from legitimate sources is, I think, weak. The first problem is that so many people on Wall Street were making so much money legitimately, or at least in ways that didn't violate criminal laws. What standard do you use to show that she should have known? It is not a situation where Bernie was the only one doing well. His success stood out, but people kept investing and they didn't suspect anything. So you must conclude that while he looked successful, he didn't didn't look so successful that most professionals were suspicious. Even though there were a few that raised flags of warnings, does this make Ruth liable?
I wish the Trustee well, and it would be nice if some more money or assets were recovered. But forcing Madoff's wife into bankruptcy will not solve the problem or make the creditors whole. Sure, she benefited greatly from the stolen money and it should be returned. Maybe she should be divested of the $2.5 million the Fed's allow her to keep. But the government has already seized all the assets they could find. So what is left for the Trustee?
