Feds suspect wide circle of co-conspirators in Madoff case

The Daily Beast reports:

There are said to be three groups of possible co-conspirators, who could potentially be charged either criminally by the Justice Department, or civilly by the SEC.

In the first group are employees of Madoff's firm who concocted false trades and sent out phony statements to thousands of unsuspecting clients.

The second group is comprised of principals in feeder funds such as Cohmad Securities Corp. and Fairfield Greenwich Group, which funneled investor dollars to Madoff and received large fees for steering this business. If they were aware of Madoff's fraud, they could face criminal charges; if they were not, they could be hit with civil charges for a lack of due diligence.

The third group is the target of an investigation that's still in its early stages into money laundering through British banks, in which US and British authorities are cooperating. This group consists of solicitors, accountants, and others in London who may have assisted Madoff in transferring funds from client accounts to a Madoff entity that lists Ruth Madoff, brother Peter Madoff, and sons Mark and Andrew Madoff among its board members.

. Sources say new information has surfaced that suggests several members of Madoff’s inner circle transferred assets to their wives, transactions thought to be laundered through an English bank.

Ruth Madoff, who was considered “innocent at first,” according to this source, is believed to have received at least $70 million from her husband and is now therefore an object of the investigation. That is one reason why she recently decided to retain her own lawyer, leaving Ira Sorkin, who has represented both of the Madoffs since December, when the Ponzi scheme was revealed.

Investigators are focusing their attention on three groups of possible co-conspirators. “There should be at least 20 indictments, between the three groups, if the feds are doing their jobs,” said one highly placed lawyer involved in the case. “Some will be conspiracy, the ones who were deep into it with Madoff, and others will be civil cases sent to the SEC for prosecution.”