Madoff jailed after admitting to fraud
Written on March 13, 2009
Bernard Madoff pleaded guilty on Thursday to charges he orchestrated the biggest fraud in Wall Street history and was ordered to jail to await a sentence that could send him to prison for the rest of his life.
In an emotional court hearing in front of scores of investors he swindled, the former Nasdaq stock market chairman spent 10 minutes describing a long-running Ponzi scheme he knew from the beginning was criminal and wrong but hoped would end quickly.
“I am painfully aware that I have deeply hurt many, many people,” including family, friends and associates, said the gray-haired, grim-faced Madoff, 70, speaking of his crime for the first time publicly before U.S. Judge Denny Chin in Manhattan federal court.
“When I began my Ponzi scheme I believed it would end shortly and I would be able to extricate myself and my clients from the scheme,” said Madoff, who wore a gray suit but none of the rings and jewelry that long were a signature of his style.
He said that shutting down the scheme, in which early investors are paid with the money of new clients, proved impossible and he soon came to realize “that my arrest and this day would inevitably come.”
Madoff was head of a family-run business in which his brother, Peter, and sons Mark and Andrew were executives in the brokerage arm of his firm. Neither they nor his wife of nearly 50 years, Ruth Madoff, were in court.
Madoff has become one of the most vilified men in America, a symbol of the unraveling of Wall Street that has laid bare other multimillion dollar frauds quick payday loan.
His swindle also cast a harsh light on securities regulators for failing to uncover his scam or other purported frauds, such as an $8 billion scheme run by billionaire Texan Allen Stanford.
150 YEARS POSSIBLE
Madoff’s swindle, which took in as much as $65 billion over two decades before the 2008 market meltdown, could land him in prison for the rest of his life. The maximum possible penalties on 11 criminal charges add up to 150 years.
The judge revoked Madoff’s bail and ordered him to jail immediately, ending his house arrest in his luxury Manhattan penthouse. He will be sentenced June 16. Some of his victims cheered as he was led out of the courtroom in handcuffs.
Prosecutors, who want Madoff to forfeit all of the money and property that can be traced back to the alleged fraud, estimated that figure at more than $170.8 billion.
“The essence of my scheme,” Madoff said in a statement he read in court, was telling clients and prospective investors he would “invest their money in shares of common stock, options and other securities of large well-known corporations.”
But he said the money was never invested. “Instead, those funds were deposited in a bank account at Chase Manhattan.”
When clients asked for redemptions — and there were more requests coming in last year than he could meet — he withdrew the money from the bank account.
Filed in: management.