Bernard Madoff Headed to Jail Following Guilty PleaMar 12, 2009 | Parker Waichman LLP
Bernard Madoff is finally going to jail. The Ponzi schemer pled guilty to 11 different counts this morning, prompting a federal judge to immediately revoke his bail, in anticipation of a June 16 sentencing. Madoff could be sentenced to as much as 150 years in jail.
During a hearing in federal court in Manhattan this morning, Madoff spoke publicly about his fraud for the first time. According to The Wall Street Journal, Madoff admitted that he ran a Ponzi scheme and that he never invested client funds as promised. He also claimed to be "deeply sorry and ashamed".
Madoff said he started the scheme during a recession, which was difficult for investing in stocks, the Journal said. "As the years went by, I realized my risk, and this day would inevitably come," he said, reading from a statement. "I cannot adequately express how sorry I am for my crimes."
The criminal charges Madoff admitted to included securities fraud, wire fraud, mail fraud, money laundering and making a false filing with the U.S. Securities and Exchange Commission.
In addition to a long jail term, U.S. prosecutors are also seeking as much as $170 billion in forfeited assets from Madoff. According to the Los Angeles Times, that amount includes all of the money that moved through the Madoff accounts since the early 1980s, when the government says the investor fraud began.
According to MSNBC.com, Judge Denny Chin revoked Madoff bail after accepting his guilty plea, saying that Madoff had means to flee and an incentive to do so because of his age. Applause broke out in the Manhattan courtroom after the judge’s announcement. Until today, Madoff had been living in his luxurious Manhattan penthouse apartment under house arrest, an arrangement that did not sit well with defrauded investors.
Madoff did not plead guilty to a conspiracy charge. Because he has insisted he acted alone - a claim prosecutors find highly suspect - and would not provide information on others who may have aided his scheme, federal prosecutors would not give him a plea deal. Thus, it is likely the 70-year-old Madoff will spend the rest of his life in jail.
Already speculation is building about other individuals who might be a target of the Madoff Ponzi scheme investigation. Most of the speculation centers on his wife, Ruth, who had kept his firm's books for a time. His sons, who worked at his firm, and who he supposedly confessed his fraud too, could be targets, as could Madoff's brother Peter, who was his firm's compliance officer.
Before his December arrest, Madoff had been a towering figure on Wall Street. Once a chairman of the Nasdaq stock exchange, Madoff was the founder and primary owner of Bernard L. Madoff Investment Securities LLC. The firm was 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 millions of dollars.”
Last November, Madoff told his investors that his fund held more than $64 million, but in reality, he only had a fraction of that amount.