A Chance to Dream Where Madoff Did

/Home/How Madoff Did it

A Chance to Dream Where Madoff Did

Gordon M. Grant for The New York Times
I
HOUSE OF SCHEMES The proceeds of the sale of Bernard Madoff's Montauk house are to go to his victims. More Photos »
THE hottest spot in the Hamptons this Labor Day weekend is not the Ditch Plains surf break or the Blue Parrot restaurant, whose celebrity owners include Renée Zellweger.

It is Bernard L. Madoff’s beach house. As news spread in recent days that the 3,000-square-foot house on the dunes in Montauk that belonged to Mr. Madoff is up for sale for $8.75 million, it became the toughest place to get into since the Surf Lodge opened a Champagne-and-espadrilles bar last summer.

The United States Marshals Service, which is overseeing the sale of the house to benefit victims of Mr. Madoff’s $65 billion Ponzi scheme, has gamely taken on the role of real estate promoter. A marshal in a blue windbreaker offers a videotaped tour that was released to the news media during which he extols, in a “just the facts, ma’am” monotone, the property’s “panoramic ocean view,” and the master bedroom with an exercise bike, “where Bernard and Ruth Madoff lived when they were here in Montauk.”

Since the Marshals Service announced on Sept. 1 that the property would be shown by a local office of the Corcoran Group, the phones of the husband-and-wife agents with the listing, Joan and Raymond Hegner, have been buzzing frantically.

Callers are told straight up that they must present a bank letter stating they are qualified to pay cash because the Marshals Service will not allow financing, Ms. Hegner said.

Still, many tours have been scheduled, she added. And it has been difficult to keep away the merely curious. Yellow police tape across the driveway to the home was yanked aside and left hanging on a tree. The address, 216 Old Montauk Highway, was publicized and is on a mailbox on the highway. But the house, a rather plain-looking gray and white contemporary with a spectacular ocean view, is not visible from the road.

A padlock was placed on the gate across the short walkway to the house from the beach after passers-by kept intruding. The real estate agents plan to install a chain across the driveway.

“I am getting a frenzy of people looking at it,” Ms. Hegner said.

On Wednesday morning, she led one of her first showings, for a husband and wife with Russian accents who had two young men in tow. All declined to give their names to a reporter. The group walked past boxes with F.B.I. tags and inventories listed on them (“12 ‘Town’ Mugs,” “8 pillows”) and, on a bedroom wall, an American flag made of wood slats bound with chicken wire. The furniture and property in the house is to be sold at auction, the Marshals Service has said.

The one personal item that had not been tagged or boxed was a half-full bottle of Redken Clear Moisture conditioner, on a ledge in the outdoor shower.

The husband with the Russian accent walked with Ms. Hegner out to the front deck, where on one side is a small swimming pool. “Put us in for $7 million,” the man said.

Inside, his wife confided: “I don’t know what he’s doing. We live in a house twice this size with a nice view. We’re going to come here with kids, two dogs, everything else?”

The man eventually followed his wife in and declared, “My son, he likes the pool.”

Ms. Hegner later said that the man, an old client of hers, had only been kidding when he made his offer.

The next day, Thursday, the Hegners held an open house for other brokers. Dozens parked their cars along the narrow highway. They were let into the house in small groups.

“The setting is spectacular and it’s well priced,” said one, Phelan Wolf, a broker at Brown Harris Stevens in Amagansett.

Whether the house’s notoriety will enhance or detract from a sale was a matter of much debate. Mr. Madoff, 71, was sentenced to 150 years in prison in June for defrauding thousands of victims in his decades-long financial fraud. The government plans to sell other properties that he and his wife, Ruth, once occupied, including a house in Palm Beach, Fla., and an apartment on East 64th Street.

Onlookers gathered on the normally quiet beach of the Montauk property, which is far from public access points and a 10-minute walk from the nearest hotel.

“They’re not going to get 7, not in this environment,” said Syl Catalanello, who said he sells commercial real estate in western Long Island. “If they get 5.5, they should take the money and run.”

Vincent Irizarry, an actor on the soap opera “All My Children,” who was in Montauk to celebrate his mother’s birthday, spoke with a fellow onlooker, Rachael Horovitz, a film producer.

“They’re selling stuff, I hear,” Mr. Irizarry said.

“I’m curious to see her shoes,” Ms. Horovitz said.

“I’d like to buy his shoes, glue them to a canvas, say something artistically about the man who walked in those shoes,” Mr. Irizarry replied.

A potential buyer in a bright green shirt stepped out of a sliding screen door onto the deck. He gazed at the ocean, but then spotted the onlookers and appeared to retreat back inside.

Ms. Hegner said she did not worry that all the looky-loos and news media attention would discourage buyers. “It’s a temporary curiosity because of it being in the media outlets right now,” she said.

The conventional 6 percent commission on an $8 million house would be $480,000, split between the broker who lists the house and the broker who brings the buyer. Those brokers, in turn, split their shares with the companies they work for.

But the Corcoran Group and the Hegners are donating their shares of the listing commission to the fund for reimbursing Mr. Madoff’s victims, said Pamela Liebman, the chief executive of Corcoran. Although Corcoran will also donate its additional share if one of its brokers sells the house, the selling agent may keep his or her share, Ms. Liebman said.

Last Friday, there were at least five showings scheduled, two to potential buyers returning for a second look. Ms. Hegner was frantically trying to catch her breath and schedule weekend showings.

Just as not everyone enjoys the hubbub of the Surf Lodge in downtown Montauk, not everyone on the beach understood what the fuss was about over an empty house.

Willa Safferstein, 15, and Ali Janicki, 16, both from Westchester County, N.Y., said they had never heard of Mr. Madoff. Ms. Janicki prodded the shell of a horseshoe crab with a stick of driftwood, smiling as the tide washed it away. “We’re on vacation,” she said.