The order by Connecticut Superior Court Judge Arthur Hiller, issued Monday and made public Tuesday, prohibits them from selling homes or moving money, and marks the first time their assets have been frozen.

"This is an important step," said David Golub, a lawyer representing the town of Fairfield, Connecticut, in a lawsuit against Madoff and the so-called feeder funds run by Tremont Group Holdings, Maxam Capital Management and Fairfield Greenwich Group.

The town's pension funds charged in a lawsuit that the funds "knew -- or willfully refused to know -- that Madoff's investment returns were not actually produced by his purported split-strike conversion strategy."

Separately, a judge in New York denied an appeal by Madoff's brother, Peter, to lift a freeze on his assets in a civil lawsuit. Peter Madoff had reached an agreement with U.S. authorities in December on an asset freeze, according to court papers.