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General Discussion / Madoff arrives in court for plea in fraud case
« on: March 12, 2009, 08:05:07 AM »
NEW YORK – Bernard Madoff arrived at the federal courthouse Thursday morning where the disgraced financier is expected to deliver on his lawyer's prediction that he will plead guilty to all 11 felony charges brought by prosecutors.
The expected plea ends a half-century career that saw him rise to Nasdaq chairman and one of Wall Street's elite, and could result in a maximum prison term of 150 years.
Madoff, 70, also faces the prospect of coming face to face for the first time since his December arrest with some of the thousands of investors whose accounts prosecutors say he oversaw since at least the 1980s.
A plea would mark the first time Madoff has spoken publicly about the scheme. The judge must hear him describe his crimes in his own words to accept it.
U.S. District Judge Denny Chin said that, assuming Madoff goes forward with plans for a guilty plea, he will give investors a chance to challenge his conclusion whether to accept a guilty plea to securities fraud and perjury, among other charges. He also will let burned investors challenge his decision whether Madoff should be allowed to await sentencing in his $7 million Manhattan penthouse or immediately go to prison.
Victims of Madoff's Ponzi scheme began arriving at court as early as 8 a.m., two hours before the hearing.
Adriane Biondo, 41, of Los Angeles, said five members of her family were affected by the fraud, including elderly relatives who were ruined. She went to court to see Madoff plead guilty and wants the judge to send him to prison immediately.
"For him to be under penthouse arrest at this point ... is just not fair," she said.
Madoff's current bail status "really infuriates everyone," said Matt Weinstein, a motivational speaker who lost the bulk of his savings in the scheme.
"People can't even afford rent anymore," Weinstein said. "He can't go on in this palace of denial."
In three months, Madoff has gone from a man known mostly as a pioneer of electronic trading in securities to an icon for disreputable money managers who live a life of affluence while fleecing those who entrust their life savings to their schemes.
The FBI claimed Madoff admitted to his sons months ago that his once-revered investment fund was all a big lie, a $50 billion Ponzi scheme that wiped out life fortunes, school trusts and charities and apparently pushed at least two investors to commit suicide.
The size of the scandal has made him an international symbol of greed and deception in difficult economic times. But it remains in dispute.
Prosecutors filed papers Tuesday saying Madoff's investment company reported a total balance of $64.8 billion in November even though it actually had only a small fraction of that amount.
Investigators say the true amount lost by investors may be between $10 billion and $17 billion and the larger estimates by Madoff include the false profits prosecutors say he generated with tens of thousands of bogus account statements cataloguing steady profits.
So far, authorities have located only about $1 billion in assets.
In a hearing Tuesday, the judge said he had been contacted by clients of Madoff's investment firm who complained — mistakenly — that he was benefiting from a plea deal. Prosecutors said there was no agreement that would have given him a shot at a lighter sentence in exchange for cooperating with investigators.
"There is no plea bargain here," the judge said.
Despite the anticipated plea, investigators say they still would face the daunting task of unraveling how Madoff pulled off the fraud for decades without being caught. They suspect his family and his top lieutenants, who helped run his operation from its midtown Manhattan headquarters, may have been involved.
In court documents, prosecutors have indicated that low-level employees were in on the scam and may be cooperating.
Court papers say Madoff hired many people with little or no training or experience in the securities industry to serve as a secretive "back office" for his investment advisory business.
Prosecutors say he generated or had employees generate tens of thousands of account statements and other documents, operating a massive Ponzi scheme, a scam in which people are persuaded to invest in a fraudulent operation that promises unusually high returns.
The money Madoff received was never invested but was used by him, his business and others or, as occurs in Ponzi schemes, was paid out to early investors, prosecutors said.
The expected plea ends a half-century career that saw him rise to Nasdaq chairman and one of Wall Street's elite, and could result in a maximum prison term of 150 years.
Madoff, 70, also faces the prospect of coming face to face for the first time since his December arrest with some of the thousands of investors whose accounts prosecutors say he oversaw since at least the 1980s.
A plea would mark the first time Madoff has spoken publicly about the scheme. The judge must hear him describe his crimes in his own words to accept it.
U.S. District Judge Denny Chin said that, assuming Madoff goes forward with plans for a guilty plea, he will give investors a chance to challenge his conclusion whether to accept a guilty plea to securities fraud and perjury, among other charges. He also will let burned investors challenge his decision whether Madoff should be allowed to await sentencing in his $7 million Manhattan penthouse or immediately go to prison.
Victims of Madoff's Ponzi scheme began arriving at court as early as 8 a.m., two hours before the hearing.
Adriane Biondo, 41, of Los Angeles, said five members of her family were affected by the fraud, including elderly relatives who were ruined. She went to court to see Madoff plead guilty and wants the judge to send him to prison immediately.
"For him to be under penthouse arrest at this point ... is just not fair," she said.
Madoff's current bail status "really infuriates everyone," said Matt Weinstein, a motivational speaker who lost the bulk of his savings in the scheme.
"People can't even afford rent anymore," Weinstein said. "He can't go on in this palace of denial."
In three months, Madoff has gone from a man known mostly as a pioneer of electronic trading in securities to an icon for disreputable money managers who live a life of affluence while fleecing those who entrust their life savings to their schemes.
The FBI claimed Madoff admitted to his sons months ago that his once-revered investment fund was all a big lie, a $50 billion Ponzi scheme that wiped out life fortunes, school trusts and charities and apparently pushed at least two investors to commit suicide.
The size of the scandal has made him an international symbol of greed and deception in difficult economic times. But it remains in dispute.
Prosecutors filed papers Tuesday saying Madoff's investment company reported a total balance of $64.8 billion in November even though it actually had only a small fraction of that amount.
Investigators say the true amount lost by investors may be between $10 billion and $17 billion and the larger estimates by Madoff include the false profits prosecutors say he generated with tens of thousands of bogus account statements cataloguing steady profits.
So far, authorities have located only about $1 billion in assets.
In a hearing Tuesday, the judge said he had been contacted by clients of Madoff's investment firm who complained — mistakenly — that he was benefiting from a plea deal. Prosecutors said there was no agreement that would have given him a shot at a lighter sentence in exchange for cooperating with investigators.
"There is no plea bargain here," the judge said.
Despite the anticipated plea, investigators say they still would face the daunting task of unraveling how Madoff pulled off the fraud for decades without being caught. They suspect his family and his top lieutenants, who helped run his operation from its midtown Manhattan headquarters, may have been involved.
In court documents, prosecutors have indicated that low-level employees were in on the scam and may be cooperating.
Court papers say Madoff hired many people with little or no training or experience in the securities industry to serve as a secretive "back office" for his investment advisory business.
Prosecutors say he generated or had employees generate tens of thousands of account statements and other documents, operating a massive Ponzi scheme, a scam in which people are persuaded to invest in a fraudulent operation that promises unusually high returns.
The money Madoff received was never invested but was used by him, his business and others or, as occurs in Ponzi schemes, was paid out to early investors, prosecutors said.