Bernard Madoff paper trail leads to NYC warehouse

January 28, 2009 7:46:13 PM PST
The paper trail in the Bernard Madoff fraud case has led investigators to a warehouse containing boxes and file cabinets stuffed with documents that could reveal more clues about what may be the largest Ponzi scheme ever, a government official said Wednesday. The Queens building was used to store old records from Madoff's investment firm, located across the East River in Manhattan, said the official, who wasn't authorized to discuss the case publicly and spoke on condition of anonymity. Investigators have been at the undisclosed site sifting through files for possible evidence, said the official, who didn't know how long they had been there.

City finance records indicate that Bernard L. Madoff Investment Securities has leased third-floor space in an office building in the Astoria neighborhood in Queens. It's unclear whether the lease is current.

FBI agents and federal regulators have been at Madoff's midtown Manhattan headquarters for weeks, working long hours to study records from his trading business and his secretive side venture as an investment adviser. The effort is considered the first phase of an arduous probe that could unearth more evidence against Madoff and possible cohorts in his inner circle.

When Madoff was arrested in December, he claimed he had lost more than $50 billion belonging to investors, court papers said. He also insisted he acted alone, even though it was a close-knit family business that employed two Madoff sons, his brother and benefited his wife.

Since then, the scandal has turned the 70-year-old former Nasdaq chairman into a pariah, evaporated life fortunes, wiped out charities and apparently pushed at least one investor to commit suicide.

Madoff has been allowed to remain under house arrest in his $7 million apartment since his lawyers and prosecutors agreed to extend a deadline to bring an indictment until early next month.

Madoff initially volunteered to cooperate with the investigation, and more recently court documents suggested he may be seeking a plea deal. But investigators say he has not been forthcoming and, even if he did resume cooperating, they no longer consider him a credible source of information.


Associated Press news researcher Judith Ausuebel contributed to this report.

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