Conn. AG shuts down purported Madoff auctions‏

Nick Rees Dec. 11, 2009, 5:32pm

Richard Blumenthal (D)

HARTFORD, Conn. (Legal Newsline) - Two auctions scheduled for this weekend that allegedly featured items connected to Bernard Madoff have been canceled by the auction company advertising them following threats of legal action from Attorney General Richard Blumenthal.

"These so-called Madoff auctions are going, going - gone," Blumenthal said. "Faced with legal action by my office, Northeast Galleries has abandoned plans to hold unlicensed auctions featuring unverified items supposedly related to Bernard Madoff and his Ponzi scam."

Blumenthal's office had threatened Northeast Galleries of New Jersey with legal action for conducting unlicensed auctions of the goods, which are allegedly tied to not only Madoff but also to his wife and victims of his Ponzi scam. Northeast Galleries had advertised for auctions this weekend in Fairfield and Westbrook after holding one last week in Avon, which also advertised Madoff goods.

Blumental's office has not yet received written confirmation from Northeast Galleries that the auctioned have been canceled and is prepared for prompt legal action if the auctions go forward.

"These auctions may be off, but my investigation continues on to determine whether items already sold as Madoff-related goods last weekend are legitimate. In a possible scam inspired by scam, Northeast Galleries has so far failed to provide my office with acceptable proof that any items auctioned in Madoff's name were legitimate."

Advertisements for the auction stated that, "Personal items belonging to Ruth & Bernie Madoff acquired from the U.S. Marshal Service...[are] to be sold to the highest bidder for immediate cash realization" and "This auction will include select jewelry that belonged to Ruth and Bernie Madoff acquired from the U.S. Marshal Service."

The advertisements, Blumenthal said, were designed to lure buyers interested in goods related to the Madoff scandal but Northeast Galleries has acknowledged that the auctioneer at the Avon auction had no information on hand as to which items were previously owned by the Madoffs and which were not. Buyers were informed that, after purchasing an item, they could call Northeast Galleries to find out if their purchase had been Madoff-owned.

To date, Northeast Galleries has not provided proof that any of the items up for auction are in any way connected to Madoff. The company has also failed to apply for or obtain licenses from Fairfield, Westbrook or the Department of Consumer Protection for the auctions, which is required by state law. Local and state itinerant vendor licenses must be applied for at least three days prior to an auction under state law with a failure to do potentially resulting in fines of as much as $50 and imprisonment for up to 60 days.

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