What Bernie Made-off With and How You Can Avoid Being Taken to the Cleaners by Unscrupulous Investment Schemes

Bernie's lawyers filed a financial statement March 13 with the U.S. Court of Appeals for the Second Circuit listing his net worth at $823 million, far short of the $60 billion lost to investors in his Ponzi scheme. $700 million of Madoff's net worth was attributed to his ownership in his market-making business which has been seized by the trustee that is overseeing the liquidation of the firm.

Here are the Madoffs' main personal assets listed in the document filed with the court:

House on Long Island................................$3 million

Art and furniture........................................$10 million

Real estate owned by Ruth Madoff........... $19 million

Ruth Madoff's jewelry................................$2.6 million

Bull, a boat on Long Island................ $320,000

Little Bull, a boat in Florida.........................$25,000

Boat slip and yacht in France.....................$8.5 million

50% of an aircraft $12 million

Steinway Piano...............................................$39,000

Silverware at Manhattan apartment.................$65,000

The document listed liabilities of $265,000 including $100,000 in credit card debt, and $151,000 in real estate taxes which have been paid.

According to the statement the Madoffs had expenses of $346,000 for insurance premiums, maintenance charges and boat storage, monthly charges for a housekeeper at their Manhattan apartment of $2860 and a yacht captain for Madoff's boat, $5250 a month.

Madoff's wife, Ruth, owns nearly all of their real estate in New York, Florida and France as well as their automobiles and yachts. Previous news reports put her assets at $70 million.

Source: NY Times article by Zachary Kouwe 3-14-09

Bernie Maddow perpetrated the largest ponzi scheme in history. He was extraordinarily successful in separating knowledgeable investors from their money because he was very clever had good connections and he had many years experience in managing other people's money.

The key to avoiding being taken is to approach any investment proposal with a healthy degree of skepticism--especially about claims of extraordinary, low risk returns. There is virtually no such thing as a high return, low risk investment. Exceptions to the rule that the higher the return the greater the risk are very rare or non-existent.

Be especially skeptical about claims from friends and relatives about extraordinarily high returns. They may be receiving high returns paid them from funds deposited by the latest group of suckers.

Don't believe everything you hear at investment seminars and read in investment brochures. Check with independent sources.

Check up on the individual or firm with state and federal authorities to see whether they are registered representatives and securities dealers. If not, don't give them any of your money.

Insist on monthly statements and check their accuracy. Any delays in honoring your request to withdraw funds should be viewed with great suspicion.

Deal with recognized first rate investment management firms like Vanguard or other mutual fund providers.

Where to get help

For questions about a broker, adviser or investment -- or to file a complaint, obtain information or report suspicious activity -- contact the following agencies or organizations:

• U.S. Securities and Exchange Commission, which was created to protect investors; maintain fair, orderly and efficient markets, and facilitate capital formation. Call 800-732-033.

• U.S. Commodity Futures Trading Commission, which was created to regulate commodity futures and option markets in the U.S. Leave a message on the consumer hot line, 866-366-2382.

• National Futures Association , to find out whether a broker or firm is registered, call 800-676-4632.

Financial Industry Regulatory Authority (FINRA) , which regulates securities firms doing business in the U.S. Call 301-590-6500.

•Your state office of securities regulation can tell you whether the individual attempting to sell you an investment product is licensed in your state and whether an investment professional or firm has a history of disciplinary action.

You bank may offer adivce on investment proposals, and a fee-for-service (not a commission salesman) investment adviser can provide you with advice and information on an investment proposal.

The bottom line for most investors is to investigate all investments carefully, deal only with reputable firms; and don't put all your eggs in one basket because, as the article linked below on the recent $180 million fraud settlement by Securities America shows, even the most reputable firms sometimes sell bad fish to their clients and put their own interest ahead of their customers.

[Securities America bills itself as one of the nation's largest broker/dealers, supports over 1900 independent financial professionals with investment and advisory products ...It's parent Ameriprise's home page says the following:

Why Ameriprise Financial ?

What sets us apart from other financial firms? We listen closely and take the time to understand your complete financial picture — your cash and liabilities, protection, investments and taxes. Through our personal approach to financial planning and advice, we can help you bring your dreams and goals to life.

Maybe that's why:

• More people come to Ameriprise for financial planning than any other company.¹
• We have more than two million clients, including individual, business and institutional clients.²
• Approximately 10,000 financial advisors³ serve clients nationwide.
• Ameriprise Financial owns, manages and administers $463 billion in assets.]