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Judge blocks Madoff bankruptcy

One week after investors file papers seeking $64 million from the swindler, judge says there is probable cause his assets should be handed over to government.

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By Amy Sahba, CNN

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NEW YORK (CNN) -- A federal judge Monday blocked Bernard Madoff's assets from being moved into bankruptcy, saying there is probable cause the assets should be forfeited to the government.

The order comes exactly one week after five investors filed papers in Federal Bankruptcy Court seeking nearly $64 million in an effort to force Madoff into involuntary bankruptcy.

Previously a different federal judge allowed investors to proceed with the filing, asserting that personal bankruptcy proceedings would be the best recourse for investors trying to recover their money.

The Securities and Exchange Commission had tried to block such proceedings, as did the trustee tasked with liquidating Madoff's assets and the U.S. Attorney's office.

Madoff is currently in jail at the Metropolitan Correctional Center in lower Manhattan after pleading guilty to operating on the largest fraud schemes in history. Madoff's lawyers have listed his worth at up to $826 million.

Madoff faces 150 years in prison when he is sentenced June 16.

-- CNN's Emily Anderson contributed to this report. To top of page

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