Bernard Madoff Bail Decision to be AppealedJan 13, 2009 | Parker Waichman LLP, LLP
U.S. prosecutors have said they will appeal a judge's decision yesterday that allows accused Ponzi schemer Bernard Madoff to remain in his luxury Manhattan penthouse on $10 million bail. The refusal by U.S. Magistrate Judge Ronald Ellis to revoke the former investment advisor's bail has reportedly angered many of Madoff's former investors - some of whom lost their entire life savings to his fraud.
Last week, U.S. Prosecutor Marc Litt asked Judge Ellis to revoke Madoff’s $10 million bail after it was discovered that he or his wife mailed several packages of valuables to family and friends. Litt said that this constituted a transfer of assets in violation of a court order. Other court papers filed by the prosecution charged that Madoff had intended to give $200 million to $300 million in investor assets that remained to select family, friends and employees. That amount included $173 million in checks he had personally signed.
Judge Ellis ruled yesterday that the prosecution failed to show that "no condition or combination of conditions will reasonably assure the safety of any other person and the community; or by a preponderance of the evidence, that there is no condition or combination of conditions that would reasonably assure the ‘presence of the defendant at trial if released.’”
Judge Ellis did, however, impose new restrictions on Madoff, including “restrictions on transfer of all property whatsoever, wherever located” belonging to Madoff. Madoff’s wife must also comply with that restriction, the order said. The judge also ordered Madoff to compile an inventory of all “valuable portable items” in his Manhattan apartment and give it to the government. He will also be required to have a security company check the inventory every two weeks and inspect outgoing mail.
According to Reuters, Judge Ellis' decision prompted Acting U.S. Attorney Lev Dassin to inform the judge that the prosecution would appeal . The judge has since ordered a stay of his decision for 48 hours until 1:00 p.m. on Wednesday.
The judge's refusal to revoke Madoff's bail also sparked anger in many, including former Madoff investors. Some of them understandably resent the fact that the man who allegedly stole from them is comfortably ensconced in a luxury penthouse.
"That is without a doubt, the most ridiculous thing I've ever heard in my life." Larry Leif told Florida TV station CBS12. "The judge that has let him stay in that apartment ought to be removed from the bench," said Leif. Leif said he invested his entire IRA, pension and profit sharing plan with Madoff. Madoff's alleged fraud, Leif said, erased 40 years of his hard work, and he has little hope of ever getting his money back.
Madoff has been confined to his apartment since his December 11 arrest for securities fraud. The 70-year-old Madoff - once a chairman of the Nasdaq stock exchange - is the founder and primary owner of Bernard L. Madoff Investment Securities LLC. The firm is primarily known for its business in market-making, or serving as the middleman between buyers and sellers of shares. However, Madoff also oversaw an investment-advisory business that managed money for high-net-worth individuals, hedge funds and other institutions.
According to the FBI complaint against Madoff, that business was largely a Ponzi scheme. The FBI said Madoff “deceived investors by operating a securities business in which he traded and lost investor money, and then paid certain investors purported returns on investment with the principal received from other, different investors, which resulted in losses of approximately billions of dollars.” Madoff reportedly told employees that his fraud could cost investors as much as $50 billion.