Bernard Madoff’s victims can force him into bankruptcy and seek any assets that weren’t proceeds of his crimes, a federal judge ruled today, over objections from federal prosecutors, the SEC, and the trustee overseeing the bankruptcy of Madoff’s firm. The judge ruled that bankruptcy had the best chance of protecting all of Madoff’s victims, and that the benefits outweighed concerns over the cost and time involved.
Prosecutors had argued that criminal forfeiture laws would be a more efficient means of shaking down the Ponzi schemer. But the judge disagreed, saying the government hadn’t proved that all Madoff’s gains were ill-gotten, wouldn’t get victims involved, and would have a harder time than courts in seizing Madoff’s foreign assets. “What are you going to do,” he asked, “send the Marines over to seize the French chateau?”