Ex-Madoff customers seek swindler's personal assets

NEW YORK (Reuters) - Some of jailed swindler Bernard Madoff's defrauded customers moved on Wednesday to try and get access to his personal assets and any other items that may have been transferred to his family or other people.

Papers filed in U.S. District Court in Manhattan in the civil case against Madoff, 70, asked a judge to include personal assets among those of his firm being gathered under the auspices of a bankruptcy court to pay back fraud victims.

A court-appointed trustee is winding down Bernard L. Madoff Investment Securities LLC to find assets to sell to return money to thousands of his former customers. But there is no trustee of personal assets of the man who pleaded guilty on March 12 to running Wall Street's biggest investment fraud.

"The recovery of Madoff's assets which may have been been transferred to family members or third parties may be more easily recovered in a bankruptcy proceeding for Madoff himself, rather than less directly in the bankruptcy case of the Madoff securities firm," said Jonathan Landers, a lawyer for scores of Madoff customers represented by Milberg LLP and Seeger Weiss LLP, which filed the request.

Landers said an example of personal assets were the boats called "Bull" and "Little Bull" seized by U.S. authorities in Florida on Wednesday.

"We are trying to make it clear how (the boats) relate to the victims," said the lawyer, who represents customers with claims totaling about $64 million, according to court papers.

Madoff is in jail pending sentencing in June.

On March 17, U.S. prosecutors signaled their intent to ask for $31.5 million from loans to Madoff's sons and $2.6 million worth of his wife Ruth's jewelry. An earlier filing sought Madoff and his wife to forfeit more than $100 million worth of homes, cars, boats, securities and valuables.

"We want to make sure that no assets slip through the bankruptcy process because they are his personal assets and not assets of the firm," Landers said. "We want to make sure money is made available for victims."

Madoff admitted to running a classic Ponzi scheme of as much as $65 billion over 20 years, bilking investors worldwide from big banks to charities. A Ponzi scheme is one in which early investors are paid with the money of new clients.

The cases are Securities and Exchange Commission v. Madoff et al 08-10791 in United States District Court for the Southern District of New York (Manhattan)

Securities Investor Protection Corp v. Bernard L. Madoff Investment Securities LLC 08-01789 in U.S. Bankruptcy Court for the Southern District of New York.

(Reporting by Grant McCool; Editing Bernard Orr)