Published December 19, 2008

Madoff's wife under investigation

Evidence suggests she may have helped track payments

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(NEW YORK) Ruth Madoff, the 67-year-old wife of alleged fraud mastermind Bernard Madoff, is being investigated by US regulators over whether she helped maintain secret records used in a US$50 billion Ponzi scheme, a person familiar with the matter said.

Madoff: Bail hearing postponed again and he's now subject to electronic monitoring and a 7pm curfew

The Securities and Exchange Commission, combing through files at Madoff's New York firm, found evidence that Ruth Madoff may have helped track payments, the person said, declining to be identified because the inquiry isn't public. Two people with knowledge of the probe said on Dec 14 that the agency is also examining why her name appears on related transactions.

'She's not charged with anything,' said Ira 'Ike' Sorkin, a New York attorney at Dickstein Shapiro LLP, which represents the couple. 'The SEC has not sought to freeze her assets. She's under no bail conditions.'

Authorities haven't accused Ruth Madoff of wrongdoing.

US Magistrate Judge Gabriel Gorenstein, who is overseeing criminal proceedings against her husband, on Wednesday ordered the couple to surrender their passports. Bernard Madoff's wife and brother, Peter, were the only people willing to sign a US$10 million bond to secure his release. Ruth Madoff is seeking to hire her own lawyer, a person familiar with the matter said.

Bernard Madoff, 70, was arrested on Dec 11 and charged with a single count of securities fraud. In court documents, prosecutors and the SEC, he had said that his investment advisory business was 'all just one big lie'.

The couple appeared in court on Wednesday to sign documents to give up homes in Montauk, New York, and Palm Beach, Florida, if Bernard Madoff flees. His bail hearing was postponed a second time in as many days and he is now subject to electronic monitoring and a 7 pm curfew.

Ruth Madoff, who also has a master's of science degree in nutrition from New York University, co-edited a cookbook in 1996 called The Great Chefs of America Cook Kosher. The book contains recipes for kosher dishes by well-known chefs, such as Daniel Boulud and Wolfgang Puck.

In another development, Fairfield Greenwich Group, the fund whose clients stand to lose US$7.5 billion in Madoff's alleged Ponzi scheme, is considering suing its accountants, PricewaterhouseCoopers (PwC), for failing to detect the fraud, the Financial Times reported on its website.

The fund, which is currently the biggest known loser in the Madoff scandal through its investments in Bernard L Madoff Investment Securities, is considering the move after an auditor was named in a case brought by another victim, the paper said.

PwC and Fairfield could not be immediately reached for comment by Reuters. -- Bloomberg, Reuters