Feds Seize Madoff's Palm Beach Mansion and Boats

U.S. Marshals today seized Bernie Madoff's Palm Beach mansion and two boats.

The 2008 property tax bill was $157,298. Golden said the estate would be "monitored and maintained" and is no longer considered Madoff's property.

Other properties the U.S. is going after that will cost a pretty penny to maintain: [More...]

....a $7 million Manhattan penthouse bought in 1984, ... a $1 million home in Cap d' Antibes, France and a $3 million luxury home on New York's Long Island.

That means the taxes and maintenance will be paid by the Government, i.e., taxpayers.

Eventually the properties will be sold and proceeds distributed to victims. In the meantime, it looks like the Government is going to have to foot the bill, which it will then subtract from the amount available to victims. Maybe it would have been better for the victims to let the Madoff's keep the properties (and continue footing maintenance bills) until final orders of forfeiture were entered.

That's probably why Madoff's lawyer said today he has no objection to the seizures. It's a cost savings for his client.

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    Well (none / 0) (#1)
    by Ga6thDem on Wed Apr 01, 2009 at 07:34:14 PM EST
    hopefully the thing will come to trial soon since we're all going to be footing the bill. I'm so sick of footing the bill for these losers. Maintain their property! Buy their toxic assets! Pay their bonuses! It sounds like the Feds agreement with Madoff could've been written by Geither himself.

    They can't waive the taxes during this (none / 0) (#2)
    by Inspector Gadget on Wed Apr 01, 2009 at 07:35:01 PM EST
    time period? Seems the taxpayers are carrying more than their fair share of the burdens over what the investors and bankers have done.

    (I've noticed the banks aren't paying the property taxes on some of the properties they have foreclosed on in AZ, too.)

    it's government collecting the taxes (none / 0) (#3)
    by Democratic Cat on Wed Apr 01, 2009 at 08:44:36 PM EST
    So either federal taxpayers pay the taxes, or, if they are waived, citizens of the county/state where the properties are located take the hit -- because the county won't collect the revenue. No matter what, someone is paying. It seems to me that if the feds take the properties, they (that is, we all) have to pay the taxes.

    Who would pay the taxes (none / 0) (#4)
    by Steve M on Wed Apr 01, 2009 at 09:09:29 PM EST
    if they left the home in Madoff's possession?  Are they going to levy his assets if he doesn't pay?

    Since the government is pretty much entitled to total forfeiture of his assets in the name of restitution, does it make a big difference if they take the home now or later?

    Do you know the legal basis (none / 0) (#5)
    by Peter G on Wed Apr 01, 2009 at 09:14:31 PM EST
    of these seizures, TL?  Have you located and seen the order the Marshals are carrying out?  Is it preliminary order of forfeiture, or what?  I can't quite figure it out, since Madoff has only pleaded guilty but hasn't been sentenced. Did the plea trigger forfeitures?

    The Government filed (none / 0) (#7)
    by Jeralyn on Wed Apr 01, 2009 at 09:58:20 PM EST
    notices of intent to seek forfeiture of specific properties on March 15 and 17.

    It's criminal forfeiture and he pleaded guilty to the forfeiture counts but disputed the amounts. There's a March 6 letter about the forfeitures that's sealed but the media has filed a motion to unseal it. Madoff's lawyer filed a letter today agreeing parts should be unsealed.

    Maybe Madoff agreed to the seizures.


    thanks (none / 0) (#8)
    by Peter G on Wed Apr 01, 2009 at 10:21:34 PM EST
    That makes sense.  The seizures weren't really a raid or anything, just taking possession pursuant to an agreed order.

    hm (none / 0) (#6)
    by connecticut yankee on Wed Apr 01, 2009 at 09:57:27 PM EST
    In Florida they have that "save our homes" deal where property tax value is capped at 3% per year.  Seems like a pretty big bill, I bet he didnt have it long.  

    In Florida the newcomers fund the growth, the old guard doesnt pay much for property taxes, especially old money near the coast.

    Guess Ruth filing for (none / 0) (#9)
    by Amiss on Thu Apr 02, 2009 at 12:16:46 AM EST
    homestead exemption trick didnt work. Didnt think it would since she has not been living in it as her primary residence.

    there is the question (none / 0) (#10)
    by Bemused on Thu Apr 02, 2009 at 07:20:51 AM EST
     of what incentive Madoff or his family would have to maintain (or pay the taxes) on the properties.

      If somene knows he is going to lose a property with no recopense in the short-term future, they may decide it's not the best use of dwindling money.

      If the owner fails to maintain and pay the taxes, the sale value of the properties decreases. so, it is quite possible (though you'd need to do a case by case analysis) that it makes more sense to take the properties now, assume the costs and maximize resal value as opposed to allowing the owner to let them decay and lose value.

      There may also be a concern that personal property or fixtures within the property might be removed unless the properties are taken.