U.S. judge orders Madoff assets secured for seizure

By Grant McCool

NEW YORK (Reuters) - A U.S. judge blocked the transfer of the personal wealth of swindler Bernard Madoff and his wife because it could be subject to forfeiture as various parties compete to lock down the assets for distribution to defrauded investors.

The order on Monday by Judge Denny Chin, who oversees the criminal case against Madoff, came on the same day a bankruptcy court judge approved the appointment of an interim trustee to coordinate efforts to recover the former investment adviser's property and money.

Madoff pleaded guilty in March to running the biggest investment fraud in Wall Street history.

U.S. prosecutors said in court papers on Friday that Chin should restrain the Madoff assets so they are not part of any proceeding in bankruptcy court.

At a hearing in U.S. Bankruptcy Court in New York on Monday, Judge Burton Lifland said that activities by various authorities to recover Madoff assets had been "disjointed and uncoordinated."

U.S. prosecutors, the U.S. Securities and Exchange Commission, the court-appointed trustee liquidating Madoff's brokerage firm and groups of investors are among those seeking to find and recover billions in assets, which include homes, boats, cars and business interests.

"Clearly there has to be a trustee in bankruptcy at least on an interim basis to sit at the table to try and coordinate all of the activities surrounding the Madoff interests," Lifland said in bankruptcy court.

The case was brought by a group of investors who wanted to force Madoff into personal bankruptcy as a way of making sure all of the assets were accounted for.