Madoff-Prompted Bill Heads to CT Governor

June 5, 2009 ( - A bill headed for the desk of Connecticut Governor M. Jodi Rell would crack down on money managers who carry out schemes to defraud investors by stiffening penalties and broadening the ability to seize ill-gotten assets.

Prompted by the high profile Bernard Madoff Ponzi scheme, House Bill 6339,An Act Concerning the Forfeiture of Property Obtained by Securities Fraud, passed both the state House and Senate unanimously, according to a New Haven Register news report.

The news report said the legislation expands the state’s organized crime statute — Corrupt Organizations and Racketeering Act (CORA).It allows the state to seize the assets of anyone found guilty of investment securities fraud, and if the defendant transfers property to avoid forfeiture, the court would have the power under the law to set aside the transfer.   

The court would be able to order the property converted to cash and given to a state agency for public use, order it sold or transferred to an innocent party, or order equitable relief.

CORA imposes lengthier prison sentences and steeper fines on white-collar criminals, according to the Register.