Bernard Madoff’s jewelry has turned out to be a star player in the unfolding drama of his giant Ponzi scheme. First, prosecutors moved to freeze his assets in January 2009, since he and his wife shipped more than a $1 million dollars worth of jewelry and watches to friends and relatives (I think there were 16 watches, 4 brooches, an emerald ring and a couple of cuff link sets). Now prosecutors are pursuing more than $2.6 million in Ruth Madoff’s jewelry and 35 watches and cuff links that belong to Bernard. The sad fact is that this dollar figure is so paltry compared to the $170 billion they are seeking in forfeiture, it’s almost irrelevant. Plus, I would bet that the $2.6 mil figure is replacement cost on appraisals, so there is NO WAY they are going to recover that amount in the secondary jewelry market. This situation shows how jewelry has historically been a way to hold (or hide) wealth: it is small and extremely valuable, so you can easily transport (or UPS), and it always has some intrinsic value.
Speaking of the Madoffs and jewelry, there is another part of the story unfolding behind the scenes. Remember how I wrote about How to Sell Your Jewelry? I mentioned a company called Circa, a NYC-based jewelry-buying company that has offices in several major cities. Turns out business is brisk there, with their office in Palm Beach, FL sending up regular shipments of old family jewelry that Madoff’s victims are having to sell to cover ordinary expenses. Circa CEO Chris Del Gatto says in a New Yorker article that his company has to become “the priest and the rabbi, the psychiatrist” helping people liquidate their collections.
Which brings me back to my original question to NY prosecutors: What are you planning to do with Ruth and Bernie’s jewelry? There’s Circa or other private brokers. Or how about an auction? I can see the Sotherby’s or Christie’s catalog cover now: “Own a Piece of Ponzi History”, or “Captured Gems: Jewels from a Felon”. It’s probably better stuff than the seized drug dealers loot the traveling auctions sell at convention centers (diamond-encrusted pit bull on a 2 inch diameter chain, anyone?). Hey, if you can’t recover the millions in your portfolio, you can at least own his engraved Rolex and show it around at parties.