Prosecutors Point to Signed Checks in Opposing Bail for Madoff

By ALEX BERENSON

Pressing the case that Bernard L. Madoff should have his $10 million bail revoked, federal prosecutors said in court documents on Thursday that investigators found 100 signed checks worth $173 million in Mr. Madoff’s desk on the day of his arrest.

The checks, which were to be distributed to family members, employees and friends, are another indication that Mr. Madoff, the financier accused of running a $50 billion Ponzi scheme, has tried to hide assets from his investors, prosecutors wrote in a brief to Magistrate Judge Ronald L. Ellis of United States District Court in Manhattan.

On Monday, prosecutors asked Judge Ellis to revoke Mr. Madoff’s bail, contending that Mr. Madoff and his wife, Ruth, had violated his bail conditions by mailing more than $1 million in valuables to family members in late December. By mailing the valuables, Mr. Madoff showed that he may be a flight risk, prosecutors said.

“When the defendant’s office desk was searched, investigators found approximately 100 signed checks totaling more than approximately $173 million, ready to be sent out,” two assistant United States attorneys, Marc O. Litt and Lisa A. Baroni, wrote in a letter to the judge. “The only thing that prevented the defendant from executing the plan to dissipate those assets was his arrest by the F.B.I. on Dec. 11.”

The prosecutors also criticized Mr. Madoff for referring to the jewelry and watches that he mailed to his sons in late December as personal items. “What may be merely sentimental baubles to the defendant are, in the posture of this case, valuable assets that may comprise a meaningful part of the assets available to be forfeited,” they wrote.

They also called Mr. Madoff’s explanation that he had mailed the jewelry and watches in an effort to reach out to friends and family “preposterous,” adding, “That’s what telephones, e-mails and personal letters are for.”

Lawyers for Mr. Madoff have said he should not have his bond revoked but should instead remain under 24-hour house arrest at his luxury Manhattan apartment. Mr. Madoff has surrendered his passport, is wearing an electronic ankle bracelet and is under guard, so he does not represent a flight risk and should not be jailed, they said.

Judge Ellis may rule on the government’s request as early as Friday.

Meanwhile, in London, Britain’s Serious Fraud Office opened an investigation on Thursday into Mr. Madoff’s business operations to unearth possible criminal offenses.

The British agency called on investors, clients, former employees and other stakeholders to step forward and help with the investigation, which intends to “discover the truth behind the collapse of these huge financial structures,” its director, Richard Alderman, said in a statement. The agency said it had set up a special hot line and calls had already started to come in Thursday afternoon.

The investigation was prompted by an interim report about the British businesses by Grant Thornton, which is acting as the provisional liquidator of Mr. Madoff’s operations in London, and followed talks with government authorities. The agency will work closely with the F.B.I. and other organizations in the United States.

The London businesses of Mr. Madoff were managed through Madoff Securities International, based in the wealthy Mayfair neighborhood that is home to many London hedge funds. The business is incorporated in Britain and documents filed with a British registry show that the unit had about $170 million in assets when Mr. Madoff’s firm, Bernard L. Madoff Investment Securities L.L.C., collapsed last month.

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