Image: Madoff
Louis Lanzano  /  AP
Bernard Madoff and his wife recently agreed to let the government sell off the property.
updated 4/2/2009 7:09:45 PM ET 2009-04-02T23:09:45

Even Bernie Madoff isn’t exempt from the real estate slump.

The Florida mansion that prosecutors seized from the Wall Street swindler appears to have lost a big chunk of its value since Palm Beach County officials assessed its worth last year at $9.3 million.

A new appraisal that federal officials had done in March pegged the property’s likely market price at $7.45 million.

Prosecutors disclosed in a court filing Thursday that Madoff and his wife tentatively agreed to let the government sell off the waterfront Palm Beach home while the courts decide how much of the family’s fortune should be forfeited and distributed to victims of his Ponzi scheme.

The planned seizure was accelerated, however, because of the hefty cost of maintaining the five-bedroom home and legal complications created by a competing claim to Madoff’s assets posed by a lawsuit in Connecticut.

Federal marshals seized the house Wednesday, along with a vintage, 55-foot yacht called Bull, docked in Fort Lauderdale, Fla., and a 24-foot motorboat.

The U.S. attorney in Manhattan revealed Thursday that marshals also had taken possession of a 38-foot yacht called Sitting Bull at a marina in Montauk, on the eastern tip of Long Island.

Court papers say the monthly costs on Madoff’s 6,500-square-foot house on the Intercoastal Waterway included $3,000 for homeowners insurance, $1,000 for utilities and $3,300 for maintenance and security. The family’s annual flood and hurricane insurance bill was $115,000.

Madoff pleaded guilty last month to taking billions of dollars from investors around the world and funneling it into what could be the largest Ponzi scheme in history. His victims included huge hedge funds, global banks and thousands of smaller investors who are now scrambling to recover whatever they can of their life savings.

Prosecutors are trying to preserve as much of Madoff’s fortune as possible to distribute among his victims.

They said in the court filing that they had refused to allow the family to pay its home insurance bill for April because they didn’t believe that Madoff and his wife, Ruth, would own it for much longer.

Madoff, a 70-year-old former Nasdaq chairman, could get up to 150 years in prison when he’s sentenced in June.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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