Madoff moves closer to involuntary bankruptcy

Financial Crisis Posted on

Bernard Madoff, already destined to a life behind bars, has moved a step closer to finding himself doing time like an inmate in debtor's prison.

As expected, a group of Madoff's investors Monday filed court papers to push the 70-year-old Wall Street swindler into involuntary bankruptcy and strip him of whatever personal fortune he has left.

In a four-page filing in federal bankruptcy court in Manhattan, a group of five investors that included individuals, a trust and a partnership said that Madoff defrauded them of $63.9 million through the infamous Ponzi scheme to which he pleaded guilty last month.

The investors want to put Madoff into personal bankruptcy as a way of assuring that his assets come under the jurisdiction of the New York bankruptcy court, which is already liquidating his fraudulent business. The business bankruptcy, being supervised by a special trustee, has located more than $1 billion in customer funds. Madoff's own court filings indicated he and his wife, Ruth, who isn't affected by the personal bankruptcy action, had accumulated more than $823 million in assets.

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