January 27th, 2009
08:30 AM ET

$10 mansion?

Louise Story
New York Times

Housing prices are falling around the country, but this one sounds hard to believe: A seaside mansion on Jupiter Island in Florida, bought for more than $13 million five years ago, was just sold for $10.

Richard S. Fuld Jr., the former chairman and chief executive of Lehman Brothers, testifying at a Congressional hearing last October.

That’s right, 10 bucks. But in this case, the transaction is likely to raise eyebrows for reasons other than the price.

The seller, according to county records, was Richard S. Fuld Jr., the former chairman and chief executive of Lehman Brothers. The buyer was his wife, Kathleen.

The motivation is unclear, but Mr. Fuld has been under intense scrutiny since Lehman declared bankruptcy in September.

The longtime leader of the brokerage firm is at the center of a federal investigation into whether Lehman executives misled investors about the state of the company. And he was grilled by lawmakers at a Congressional hearing in October.

Mr. Fuld said in sworn testimony before a Congressional panel last year that while he took full responsibility for the debacle, he believed that all his decisions “were both prudent and appropriate” given the information he had at the time.


Filed under: 360° Radar • Culprits of the Collapse • Economy • Louise Story
soundoff (13 Responses)
  1. Mike, Zephyrhills, FL

    Wont do anyone any good, there is a 5 year statue for changes and the Judge can throw any transactions made 5 yrs or less to these properties etc...

    Also filing for Divorce wont work either! unless filed before the problems started.

    January 27, 2009 at 9:20 pm |
  2. earle,florida

    I'd like to say that the open criminality of these scoudrels is infinite! There was a sad story in a Michigan newspaper about a 93 year old man freezing to death in his house.The reason? He was $1,000 dollars in the rears,so they shut his power off! Why do I mention something so abstract/different then Mr.Fuld situation? Well I find the comparisons typical of todays justice system,where they can bailout thru the bankruptcy courts a Billion$,upon Billion$ failure even though malfeaseance,and laws were clearly brokened,and yet they have no money for the helpless! There an old saying,and I'll quote the best I can: A society is judged on how well it take care of it's youth,and elderly! PS We are failing miserably,..JMHO

    January 27, 2009 at 2:44 pm |
  3. Renee

    @ Cindy: The law is very specific in the state of Florida on homestead exemption on real property. The state of Florida prosecutes folks for not paying correct property taxes (homestead vs. non-homestead) and for declaring multiple residences in the state for homestead exemption. You also have to apply for the homestead exemption in the state and swear by affadvidit the house is your only primary residence. Of course there are always crooks who beat the system. When folks try to beat it then often the respective "other" state will try to collect the state taxes owed to them.

    Really in Fuld's case this is about change of ownership of an asset and not homestead exemption which is two separate issues. I would assume Fuld's primary residence was in New York since that was Lehman's primary office. Florida was just a junket for rest, play and great times!

    If Toobin is on tonight ask him on the live blog about homestead exemption vs. ownership issues. I am sure he can clarify the law for you as I am not an attorney.

    January 27, 2009 at 12:54 pm |
  4. Cindy

    @ Renee...All you have to have is a Florida drivers license to declare Homestead. I know because my family owned homes there and my dad had the Homestead Exemption and we did not live there at all.


    January 27, 2009 at 11:07 am |
  5. Renee

    Sorry, Cindy, I must disagree. It's time to pull Toobin into the conversation.

    Declaration of Domicile and Homestead Exemption are for folks who declare Florida as their home and primary residence respectfully. You must live in your home for 6 months and 1 day to declare Florida as your home. There is no state tax in Florida so folks do this all the time.

    Husband and wives can transfer of assets between themselves whenever they want to for any reason. It is a marital right.

    Joint ownership vs. tenants in common vs. tenants by the entirety are different ways of owning homes in addition to blind trusts, revocable trusts, irrevocable trusts and corporate entities. Each has there own legal standing on who owns what and when.

    January 27, 2009 at 10:56 am |
  6. Bill Skeat

    If this man is convicted of a crime, then everything he brought with the money from his crimes should be confiscated and sold to reimburse his victims.

    January 27, 2009 at 10:09 am |
  7. Cindy

    @ Kenni...Florida has a law called Homestead Exemption. You can sign up for it and if you are ever sued the one suing you can not take your house. So therefore Fuld would sell his mansion to his wife and she can then sign up for Homestead Exemption and then no one can take their home because it is in her name with the exemption attached.


    January 27, 2009 at 10:06 am |
  8. Justin

    THIS MOVES OLD..... Its called a house after he gets out of jail. THANK WIFE !!!

    January 27, 2009 at 9:50 am |
  9. Epistling

    Off with his head!

    January 27, 2009 at 9:44 am |
  10. Jessica

    Ah yes, just one of the many loopholes allowed for the uber-wealthy to avoid consequences for their actions. Sure, elderly folks middle America isn't allowed to give anything to their kids for 5 years if they're trying to qualify for Medicaid, but a white collar crook like Fuld (Madoff, etc.) can sell his mansion to his wife for $10 and since on paper it no longer belongs to him, it can't be used to pay off fines for his criminal actions.

    That's right, welfare is bad unless it goes to banks and the uber-wealthy.

    January 27, 2009 at 9:38 am |
  11. kenni

    that's not true. an assets acquired while the couple is married is joint property. although he may want to take his name off the bulk of things, I am sure he will still be held accountable for the assets in his, his wife and both their names.

    January 27, 2009 at 9:30 am |
  12. Cindy

    O...I bet he sold the house to his wife because if he gets sued they can only take what is in his name not hers. So therefore they couldn't take his house from him. People do that all of the time!


    January 27, 2009 at 9:21 am |
  13. Adam

    So I guess he'll go to the Capitol with his hand stuck out asking for the government to give his a tax rebate on his $12,999,910mn capital loss? Then again when his wife sells it back to him (for whatever unlikely reason, just say hypothetically) for say $20, would _she_ then have to pay tax on that $10 capital gain? (sarcasm).

    January 27, 2009 at 8:56 am |