Unless you were in media-deprived seclusion yesterday, you have already heard that Bernie Madoff went to court and never went back home. While Bernie adjusts to his new multi-million dollar residence (paid for, like his penthouse apartment, by others), The Boston Criminal Lawyer Blog now reviews the star swindler’s performance as his “15 minutes of fame” seems to near its end.
Don’t misunderstand me…the results of his white collar crime will be with us much longer than said 15 minutes.
What once was considered a well-respected investment professional now had to wear a bulletproof vest to court.
Bernie pleaded guilty yesterday. He has not yet been sentenced. However, in play was the issue of whether or not he would be allowed to stay home pending sentencing. Apparently, he would not have the prosecutors to help him with that issue as everyone says that no deal has been struck between the federal prosecutors and the defense.
So how to try to stay home and get as gentle treatment from the System as possible? Well, if your “golden tongue” helped you outsmart the world for many years, why not go with what works?
So, Bernie made a speech.
“I realized that my arrest and this day would inevitably come,” Madoff began in a courtroom crammed with many of the investors he cheated out of billions of dollars.
Translation for the suspicious mind: I have had more than enough time to plan for this day, so let’s see if it works out as planned like the last almost 20 years did.
The 70-year-old swindler could get up to 150 years in prison at sentencing June 16 on 11 counts, including securities fraud and perjury. He could also be fined and ordered to pay restitution to his victims and forfeit any ill-gotten gains.
In a long, detailed statement delivered in a soft but steady voice, Madoff implicated no one but himself in the vast Ponzi scheme. He said he started it as a short-term way to weather the early-1990s recession and was unable to extricate himself as the years went by. “I am actually grateful for this opportunity to publicly comment about my crimes, for which I am deeply sorry and ashamed,” Madoff said about the now-estimated $65 billion scandal.
Translation for the suspicious mind: Boy, I am really happy to be here, judge. I’ve been wanting to confess my crimes for a long time and this is my chance to get it off my chest. By the way, if you believe that, let me tell you that I am really, really, really sorry about my bad behavior and am now ready to be a good boy.
Bernie also explained that his professional work was not all crooked. He explained, ” I want to emphasize today that while my investment advisory business — the vehicle of my wrongdoing — was part of my firm Bernard L. Madoff Securities, the other businesses my firm engaged in, proprietary trading and market making, were legitimate, profitable and successful in all respects. Those businesses were managed by my brother and two sons.”
Translation for the suspicious mind: Don’t go there, feds. My entire family are the good guys. They should be allowed to keep all that money. Don’t you remember they turned me in? Hey, trust me on this!
U.S. District Judge Denny Chin promptly revoked the $10 million bail that had allowed Bernie to remain semi-free since he allegedly confessed to his sons three months ago. In ordering him jailed, the judge said Madoff had the means to flee and an incentive to do so because of his age.
There was a smattering of applause after the judge announced Madoff would go directly to jail — the drab, windowless high-rise Metropolitan Correctional Center next door to the courthouse to await sentencing. But that did not lessen his victims’ anger or satisfy their desire for retribution.
Because Madoff pleaded guilty as charged, purportedly without any kind of deal with prosecutors, he is under no obligation to cooperate with them. As a result, some legal experts and others have speculated that he is sacrificing himself to protect his wife, his family and friends.
The court appearance came as a disappointment to many of Madoff’s investors, who hoped to hear him say who might have helped him pull off the scam, and where the money went.
It is difficult to understand how people who know that Bernie has allegedly refused to make a deal with prosecutors and reveal things like where the money is was going to simply incorporate such information as a “freebie” in his speech.
“So he spends the rest of his life in jail — is that justice? People’s lives are ruined,” said Adriane Biondo of Los Angeles, one of five members of her family who lost money with Madoff. “He’s sitting in jail? That’s awesome,” she said sarcastically. “Where’s the money, Bernie?”
DeWitt Baker, an investor who attended the hearing and said he lost more than $1 million with Madoff, said: “I’d stone him to death.”
While the federal system does now have a death penalty, it is not used in white collar crimes and “stoning to death” is no longer used.
Prosecutors gave assurances that they are investigating Madoff’s wife and other family members and employees to determine what role, if any, they played in the scam.
Prosecutors have already said low-level employees in Madoff’s New York offices participated by mailing out tens of thousands of phony monthly statements and trading confirmations to make it look as if customers were making money in the market.
Some investors suspect their money ended up in the hands of Madoff’s wife, Ruth. She was not in court. But the mere mention of her name drew jeers and laughter.
In one instance, defense lawyer Ira Sorkin was describing how Madoff had, “at his wife’s own expense,” paid for security at his $7 million penthouse in Manhattan. Loud laughter erupted among some of the more than 100 spectators crammed into the courtroom on the 24th floor of the federal courthouse in lower Manhattan. There was more snickering when Sorkin mentioned Mrs. Madoff’s “small residence in France.”
Madoff’s thousands of victims included individuals, trusts, pension funds, hedge funds and nonprofit organizations. The scheme wiped out people’s life savings, ruined charities and foundations, and apparently pushed at least two investors to commit suicide
Afterward, Burt Ross, a lawyer from Englewood, N.J., who lost $5 million in Madoff’s swindle, said: “It’s a little bit like seeing the devil.”
Attorney Sam’s Take:
Obviously, we do not yet know what Bernie’s sentence will be. As mentioned in earlier blogs, various elements are considered by the court when deciding on the proper sentence. However, it seems clear that the sentence will include incarceration.
This plea hearing was a bit unusual in a couple of ways. First of all, everyone says that no deal has been made between the prosecution and the defense. In such a case, especially in situations where the punishment will probably mean jail, there is no rush on the part of the defense to plead guilty. Usually, even if it is not completely nailed down, there is a deal in progress between the parties. Otherwise, it makes no sense to plead guilty and go to jail.
Of course, I suppose it is possible that Bernie is so riddled with guilt that he simply wanted to save the System the time,trouble and expense of going to trial. Somehow, though, Bernie does not strike one as such a community-minded sort.
People suspect that his reason to plead guilty this way was to protect his family. However,his mere plea of guilty did not accomplish that. True, without a deal he escaped the need to cooperate with the authorities…but, then, that does not close the investigation. One would imagine that the federal government will continue to look into every move the family makes and where the money to finance that move comes from.
As I have said from the beginning…expect other defendants.
Another unusual piece to this plea is the long statement by Bernie. This was not necessary and perhaps was aimed at trying to get some kind of leniency or, more likely, to try to calm the anger against him so that further investigations will not take place.
If that was the plan, it was a waste of time. The government has already said it will continue to investigate. The government would be crazy not to do so, unless it is seeking a revolt.
Not only have people’s lives been ruined…some have actually ended. An argument could be made that Madoff is guilty of homicide of some sort. This would be unusual, but if the suicide could be traced directly to the effect of Bernie’s scheme, it could be seen as foreseeable and he could be found to be responsible. Of course, such a prosecution would take some imagination. Of course, this is the U.S. Attorney’s Office that tried to argue that Bernie was a financial threat to the community in a dangerousness hearing.
In any event, strap yourselves in. This wild ride is far from over.
Have a good, safe and law-abiding weekend!
The full text of Bernie’s statement can be found at http://www.boston.com/news/nation/articles/2009/03/1
The full article of this story can be found at http://www.boston.com/business/articles/2009/03/12/victims_worry_madoff_will_take_secrets_to_prison/?page=full