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Latest update : 2009-02-12

US authorities decided to hold off on indicting Bernard Madoff (pictured) for 30 days on Wednesday and revealed that his wife withdrew $15.5 million dollars from a Madoff-linked brokerage soon before the financier was arrested on fraud charges.

AFP - US authorities on Wednesday delayed indicting Bernard Madoff for 30 days and in a new twist said his wife withdrew 15.5 million dollars just before the financier's alleged fraud collapsed.

The latest delay by prosecutors in indicting Madoff stoked speculation that the former Nasdaq stock exchange chairman is attempting to negotiate a guilty plea over charges that he ran a 50-billion-dollar pyramid fraud.

The next deadline for indicting Madoff, 70, and bringing him to trial is March 13, a source familiar with the case said. A similar delay was made in January.

Defense lawyers and prosecutors often agree on such delays to give both sides time to work out a guilty plea and move straight to sentencing without trial, legal experts say.

Madoff was arrested December 11 after allegedly confessing to his two sons and to the FBI that he had run a giant scam known as a Ponzi scheme, where new investors' money is stolen to pay profits to existing clients.

Madoff is free on 10 million dollars bail but confined to his New York apartment under round-the-clock surveillance.

So far, Madoff is the only person charged in what could be the biggest such fraud in Wall Street history.

However, family members are among those who have come under the spotlight as investigators probe whether one man could have managed the alleged scheme by himself.

In Massachusetts, the secretary of state, William Galvin, filed a complaint in which Madoff's wife Ruth is said to have withdrawn 15.5 million dollars from a Madoff-linked brokerage ahead of his arrest and alleged confession.

The complaint says that Ruth Madoff took out 5.5 million dollars on November 25 and 10 million dollars on December 10 -- a day before Madoff's arrest -- from Cohmad Securities Corp.

Galvin is seeking to have the brokerage, which was co-owned by Bernard Madoff, banned from operating in Massachusetts over what he says is the failure to cooperate with investigators probing its dealings with Madoff.

According to Galvin, Cohmad Securities's main income came in monthly payments totalling some 67 million dollars for "professional services" and other fees made by Madoff.

Prosecutors in New York have pushed for Bernard Madoff to be detained pending trial, saying that he remains a financial threat to the community.

Last month a judge refused to lock up Madoff. The judge tightened Madoff's bail terms, however, after he sent out more than a million dollars worth of jewelry to friends and relatives in violation of a court-ordered freeze on all his assets.

On Monday, Madoff agreed to a settlement in a parallel civil case against him, effectively agreeing not to contest fraud charges brought by the Securities and Exchange Commission (SEC).

The SEC, which is the main markets watchdog, has come under withering fire for ignoring warnings for years about Madoff's activities. The body said this week that its main enforcer, Linda Chatman Thomsen, had stepped down.

Investors caught in Madoff's alleged fraud include Hollywood celebrities, charities, universities, and major financial institutions including UBS, HSBC, JP Morgan Chase, BNP Paribas and Citigroup.

Date created : 2009-02-12