Water Cooler

MONTAUK, N.Y. (CBS) ― Those who see Bernard Madoff as an evil purveyor of excess might be disappointed by his beach house: It's not that palatial.

At 3,014 square feet, the home is cottage-size by superrich standards. Its faded furnishings look as old as Madoff's epic fraud. There's no garage. Not even a walk-in closet.

But the 1.2-acre lot sits closer to the surf than larger neighboring homes on the southeastern tip of Long Island. And the house features a grand, columned porch with stunning views - undeniable selling points on display during a recent tour offered to The Associated Press.

The U.S. Marshals Service, which seized the property just east of the Hamptons on July 1, will put the property on the market this week as part of an ongoing effort to pay back investors burned by Madoff's epic fraud.

They also plan to soon enlist brokers to find buyers for a Manhattan apartment and a Palm Beach, Fla., estate once owned by the financier-turned-felon.

In estimates federal regulators filed last year, Madoff himself valued his Manhattan apartment at $7 million and the Florida property at $11 million. He said the Montauk beach house, which he bought in 1979, was worth $3 million.

Federal authorities believe the seaside property could bring closer to $8 million. Whether Madoff's notoriety hurts or helps remains to be seen.

"Our goal is to place the homes on the market soon to minimize the amount of time they remain in our inventory and maximize the return to the victims," U.S. Marshal Joseph R. Guccione said in a statement Monday.

Madoff, 71, was sentenced in June to 150 years in prison for orchestrating a massive Ponzi scheme that spanned decades and spun a web of phantom wealth.

Thousands of investors with Madoff's once-respected advisory firm believed their securities accounts were worth tens of billions of dollars. But investigators say the totals on the clients' monthly account statements were fiction. In reality, Madoff never made investments, and instead siphoned new investors' money to pay returns to existing ones - and to fuel a life of luxury.

Madoff's punishment included a forfeiture order that stripped him and his wife, Ruth, of nearly all their wealth. The order gave the marshals authority to seize and sell the homes.

Deputy U.S. Marshal Roland Ubaldo said furniture and any other personal belongings found inside will be sold at auction - "from pieces of art to Ruth Madoff's shoes."

The four-bedroom, three-bath beach house - which Ubaldo described as "simple, stylish and understated" - is at the bottom of a steep, lushly landscaped driveway off Old Montauk Highway.

"It has a panoramic view of the Atlantic Ocean," said Ubaldo. "What we gain from the sale of this house will go towards the victims' restitution."

"The market value is $7 million, and that's what we're looking for. We're not looking for anything more or anything less," added Ubaldo.

The second-floor entrance leads to a small master bedroom with a private terrace. A staircase descends to a living room with vaulted ceilings, exposed beams and a stone fireplace. A tired set of leather couches, kitchen appliances and bathroom fixtures appear to date to the 1980s.

Several sets of glass doors open onto the porch. A small swimming pool that also overlooks the Atlantic Ocean is to the left. A private path on the right winds to the beach through pine trees, rose bushes and dune grass.

The Madoffs' interior decorating taste leaned toward nautical-meets-folk art.

Still on view are American Indian rugs and pottery. A sculpture of howling wolves stands outside the front door; just inside is a large wooden goat.

There's a set of antique duck decoys on a hallway table and fishing poles tucked in one corner.

The poles, along with golf clubs, an old exercise bike, outdoor wicker chairs and virtually everything else in the house have tags with identification numbers - evidence of a painstaking inventory and appraisal for auction.

Other personal items have been boxed up and marked with labels identifying their contents, including: "17 beach towels," "Women's shoes and accessories," and "Men's casual shoes and raincoats."

Meanwhile, Madoff's alleged other woman said the disgraced financier didn't just cheat investors. Sheryl Weinstein broke her silence, claiming an affair 16 years ago with Madoff, the man who eventually took all of her money.

"It was an adult affair. Unfortunately it was with the biggest crook the world probably has ever seen," Sheryl Weinstein said.

In her book, "Madoff's Other Secret: Love, Money, Bernie and Me," Weinstein said the disgraced financier pursued her from the moment they met at a business meeting when she was Chief Financial Officer for Hadassah.

"We met at hotels. We didn't have intercourse right away. It was dating. We dated," Weinstein said.

Weinstein revealed the affair to her husband of 37 years and her son, and decided to write the book five weeks after Madoff confessed his fraud to the FBI and was arrested.

"We lost everything and the investment responsibility was mine and my family and I felt a tremendous burden of guilt and responsibility," she said.

So why the public revelation of this mutually embarrassing secret? One very simple reason: money.

"I realized I had a story and I wanted, I was willing to take the brunt of the criticism and accusations and sell my story and that's really why," Weinstein said.

Madoff's alleged mistress received a six-figure advance payment for her tell-all, and was among investors who urged a long prison sentence for Madoff.

(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)