Only hours before money swindler Bernie Madoff was arrested on securities fraud charges, his wife pulled $15 million out of a brokerage account. According to a complaint filed Feb. 11 by Massachusetts Secretary of State William Galvin, Ruth Madoff withdrew $5.5 million on Nov. 25 and $10 million on Dec. 10 from Cohmad Securities. On Dec. 11, federal agents arrested her husband for allegedly running a $50 billion Ponzi scheme.
Cohmad Securities was founded by Madoff and friend and former neighbor Maurice “Sonny” Cohn some two decades ago. The company, whose name is combination of Cohn and Madoff, had offices in the same Manhattan building as Madoff’s so-called investment advising business, Bernard L. Madoff Investment Securities.
As reported Feb. 11 in the New York Post, Cohmad Securities received millions of dollars in service fees and account maintenance from Madoff during the past eight years. According to documents from Massachusetts securities regulators, those payments totaled $67 million and made up 84% of Cohmad’s total income.
In December, both Cohmad Securities and its vice president, Robert Jaffe, were subpoenaed by Massachusetts authorities in connection with the federal investigation of Madoff.
Galvin is now trying to suspend Cohmad’s state license so that the company can no longer act as a broker in the state of Massachusetts.
Meanwhile, Madoff, the alleged mastermind behind the $50 billion Ponzi scheme, remains out of jail on a $10 million bond. So far, federal prosecutors have not charged Ruth Madoff – who’s been married to her husband for nearly 50 years – with any crimes.
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