Bernie Madoff filed past a sea of reporters and camera flashes to enter his guilty plea in front of Judge Denny Chin. Several victims spoke, asking the judge to reject the plea and force a trial. They want grueling trial to make Madoff suffer and to bring more facts out to the public.
Since he turned himself in to authorities back in December, Mr. Madoff has been living in his multi-million dollar penthouse. Back in December, the magistrate ruled that Mr. Madoff was not a flight risk and allowed him to stay confined in his palatial home.
But now Mr. Madoff is guilty. Mr. Madoff’s attorney, Ira Sorkin, tried to argue for bail. But Judge Chin would have none of it. Judge Chin revoked Madoff’s bail, calling him a “flight risk” in light of the severity of the charges for which he just entered a guilty plea. He granted the government’s request for remand. The prosecution did not even have to rebut Mr. Sorkin’s argument for bail.
According to the New York Law Journal’s Mark Hamblett, Mr. Madoff was taken out of court in handcuffs. I have not seen pictures of that yet, but I am sure there are many people looking to get a copy of that picture to frame. In handcuffs, he was delivered to Manhattan Correctional Center. (If you were thinking of sending some money to Bernie to help his cause, you should take a look at the Bureau of Prison’s Inmate Money Policy.”The deposit must be in the form of a money order.”)
Fox Business takes us on a tour of his new home until his June 16 sentencing hearing:
Presumably, Mr. Madoff’s lawyer will appeal the bail revocation. The chances of Mr. Madoff being released on bail are slim and none, and slim’s 401(k) has turned into a 201(k). After all, the appellate court gives lots of deference to the district court on bail decisions.
The next question will be how much time will Mr. Madoff serve and where. Lets add up the charges:
- Count 1: Securities fraud. Maximum penalty: 20 years in prison; fine of the greatest of $5 million or twice the gross gain or loss from the offense; restitution.
- Count 2: Investment adviser fraud. Maximum penalty: Five years in prison, fine and restitution.
- Count 3: Mail fraud. Maximum penalty: 20 years in prison, fine and restitution.
- Count 4: Wire fraud. Maximum penalty: 20 years in prison, fine and restitution.
- Count 5: International money laundering, related to transfer of funds between New York-based brokerage operation and London trading desk. Maximum penalty: 20 years in prison, fine and restitution.
- Count 6: International money laundering. Maximum penalty: 20 years in prison, fine and restitution.
- Count 7: Money laundering. Maximum penalty: 10 years in prison, fine and restitution.
- Count 8: False statements. Maximum penalty: Five years in prison, fine and restitution.
- Count 9: Perjury. Maximum penalty: Five years in prison, fine and restitution.
- Count 10: Making a false filing with the Securities and Exchange Commission. Maximum Penalty: 20 years in prison, fine and restitution.
- Count 11: Theft from an employee benefit plan, for failing to invest pension fund assets on behalf of about 35 labor union pension plans. Maximum penalty: Five years in prison, fine and restitution.
That’s a maximum penalty of 150 years. Some of these may end up being concurrent sentences. But given that Mr. Madoff is 70, it would be a good guess that he will end up spending the rest of his life in prison.
Where will he be spending that time? Jeff Chabrowe of the Blanch Law Firm told Esquire that he thinks it will be the Federal Correctional Institute in Otisville, New York because it is one of the few with a kosher kitchen. Sounds like a wild guess to me.
It is good to see justice happening swiftly and effectively. After all the fear of prosecution is one of the better ways to stop Ponzi schemes. It seems like Mr. Madoff just wants this to end and accept his punishment.
The compliance officer in me wants to hear more about the underlying facts of what made Madoff go bad. In his allocution Madoff states that:
When I began the Ponzi scheme, I believed it would end shortly and I would be able to extricate myself and my clients from the scheme. However, this proved difficult, and ultimately impossible.
What made him begin the scheme? What would have stopped him from starting the scheme? What lessons can learn from Mr. Madoff to deter the next Madoff from going to the dark side? How did he think he could extricate himself?
- Madoff Pleads Guilty, Will Spend Rest of His Life in Prison by Mark Hamblett for the New York law Journal
- The Madoff Hearing: Handcuffed Madoff is Taken Away, While Victims Speak Out by Brian Baxter of AmLaw Daily
- Live Blogging the Madoff Hearing: Bail Revoked, Madoff Remanded by Brian Baxter of AmLaw Daily
- Live Blogging the Madoff Hearing: The Victims Speak by Brian Baxter of AmLaw Daily
- The Circus in Foley Square by Brian Baxter of AmLaw Daily
- The Madoff Allocution hosted on JD Supra
- Madoff: From the Penthouse to the Metropolitan Correctional Center By Bruce Carton for Securities Docket
- The Madoff Roundup by Carolyn Elefant of Legal Blog Watch
- Bernie’s in Jail, But Will He Stay There? from the WSJ Law Blog
- Where’s Madoff Headed Next? One Lawyer’s Guess from the NY Times DealBook
- Inside Bernie Madoff’s New Home… for the Next 150 Years by By Charly Wilder for Esquire