The Manhattan attorney acting as special trustee in the case of accused Wall Street swindler Bernard Madoff said today that he has recovered about $935 million in assets, including more than $500 million held in two New York banks.

At a bankruptcy court hearing in the historic old U.S. Customs House at Bowling Green in lower Manhattan, trustee Irving Picard said he intends for all recovered assets to go to clients and that he hopes to begin distributing the funds before July.

Madoff, who is under house arrest at his Manhattan apartment on $10-million bail, did not attend the hearing before Judge Burton Lifland.

Two major Manhattan banks, JPMorgan Chase and Bank of New York Mellon, agreed last week to turn over a combined total of $534.9 million in assets they found in Madoff company accounts.

The money was transferred to Picard, who is acting as special trustee for the Securities Investor Protection Corp. SIPC is the body that is involved in finding customer funds involved in the suspected $50-billion Ponzi scheme.

In court papers filed late Monday, Picard also disclosed that he is seeking to hire a prominent British insolvency law firm to help clear up problems in the international search for assets involved in Madoff’s suspected swindle.

Picard, who was appointed trustee in December after Madoff, 70, allegedly confessed to looting thousands of his clients, said in court papers that he wants the British firm of Lovells Llp to help him and his staff sort out “jurisdictional issues” that have developed in London and elsewhere in Europe. A spokesman for Lovells declined to comment today.

In a carefully worded statement, Picard said that after British accountants were appointed in December to take care of the liquidation of Madoff’s London operation, known as Madoff Securities International Ltd., issues arose that require British lawyers to be hired.

Last month, an attorney for Lee Richards, another New York attorney who was appointed receiver in a separate Securities and Exchange Commission lawsuit against Madoff, disclosed that a deadline couldn’t be met in the case because British accountants – apparently at the request of government fraud investigators there – weren’t timely in disclosing information about assets. The accountants with the firm of Grant Thornton were hired after a court hearing in December at the Court of Justice in London, records show.

Officials at the Serious Fraud Office, the British government body that investigates financial crimes, wanted to examine the information before clearing it for transmission to New York. But it was also learned from sources familiar with the Madoff case that the British liquidators had the right to first pay off debts and other bills before sending what was left to the United States.

(Source: Newsday)