Bernard Madoff Trying to Stay Out of JailJan 8, 2009 | Parker Waichman LLP
As prosecutors try to have his bail revoked, lawyers for accused Ponzi schemer Bernard Madoff proposed that he be subjected to tougher requirements in a bid to keep him out of jail. A bail revocation would mean Madoff would have to await trial on securities fraud charges in jail, rather than in his multi-million dollar Manhattan apartment, where he is currently under house arrest.
Earlier this week, U.S. Prosecutor Marc Litt asked U.S. Magistrate Judge Ronald Ellis in Manhattan 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.
According to a letter from Litt to Judge Ellis that was made public yesterday, Madoff and his wife sent multiple packages on Dec. 24 to relatives and friends, including his sons. According to USA Today, the letter said one package contained 13 watches, one diamond necklace, an emerald ring and two sets of cufflinks - items estimated to be worth more than $1 million. Two other packages contained a diamond bracelet, a gold watch, a diamond Cartier watch, a diamond Tiffany watch, four diamond brooches, a jade necklace and other assorted jewelry. Another two parcels - the contents of which Litt said were not known - were sent Madoff’s brother and an unidentified couple in Florida, the letter said.
According to Bloomberg News, Madoff's lawyer filed a letter to Judge Ellis yesterday, claiming his client did not realize the court order prohibiting the transfer of assets applied to personal items. The letter claimed that the items had only "sentimental" value to Madoff and his wife, and said that they were in the process of trying to retrieve the valuables.
The letter also suggested that rather than revoking bail, more restrictions be placed on Madoff. Among the steps Madoff's lawyer suggested were putting jewelry in escrow, having guards search outgoing mail, and appointing a “personal receiver” over his assets and property, Bloomberg said.
Madoff has been under house arrest 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.