Madoff's Wife Withdrew Millions Before Scam Collapsed

AP

Scott Cohn
CNBC Senior Correspondent

Ruth Madoff was withdrawing millions of dollars before her husband's alleged Ponzi scheme collapsed—including $10 million on the day Bernie Madoff confessed to his sons, Dec. 10, the Massachusetts Securities Division says.

Separately, court papers filed Wednesday indicated that Madoff's attorneys are working behind the scenes on forging a plea bargain for the accused Ponzi-schemer. (See more below.)

The allegations surrounding Mrs. Madoff come in a complaint against Cohmad Securities, a Madoff "feeder fund." In addition to the $10 million withdrawal on Dec. 10, Mrs. Madoff allegedly withdrew $5.5 million on Nov. 25.  Click here to read the complaint.

Cohmad Securities shared office space with Bernie Madoff's firm, and his brother Peter Madoff was on Cohmad's board. State regulators in Massachusetts are seeking to revoke Cohmad's license, citing the firm's relationship with Bernie Madoff's firm, and alleging Cohmad has been withholding information from regulators.

The complaint says the transactions with Mrs. Madoff were among "the few reports produced by Cohmad," and are proof Cohmad knew about Madoff's scheme.

(Watch the accompanying video for more...)

Meanwhile, a plea bargain could be in the works for the 70-year-old financier.

According to court papers filed this afternoon, Bernie Madoff's attorney and federal prosecutors "plan to continue" talks about "a possible disposition of the case," which could mean a plea bargain.

Because of the pending talks, according to the filing, Madoff agreed to waive today's deadline for prosecutors to either obtain an indictment or present their evidence against him. That deadline has now been pushed back to March 13.

Madoff remains under house arrest in his Upper East side penthouse, charged in a criminal complaint with running a $50 billion Ponzi scheme.

A spokeswoman for the U.S. Attorney's Office in Manhattan, which is prosecuting the case, was not immediately available for comment.

The Wednesday deadline had been the date for the government to persuade a federal grand jury to bring an indictment against Madoff, a former chairman of the Nasdaq stock market and once a respected money manager.

It is not unusual for such deadlines to be extended as prosecutors and the defense discuss ways to resolve a case. Madoff's lawyers have said their client is cooperating with government investigations into the alleged swindle.

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—Reuters contributed to this report.

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