Thread: Madoff Charged in $50 Billion Fraud at Advisory Firm

Madoff sentenced to 150 years
Federal judge gives maximum sentence to Ponzi mastermind following his apology and victims' request for life sentence.

Last Updated: June 29, 2009: 12:03 PM ET

NEW YORK (CNNMoney.com) -- A federal judge sentenced Bernard Madoff, the convicted mastermind of the largest and most sweeping Ponzi scheme ever, to the maximum sentence of 150 years in federal court Monday.

Judge Denny Chin of U.S. District Court in New York announced the sentence just moments after Madoff apologized to his victims.

Chin said the maximum sentence was important for deterrence, and also for the victims.

Victims erupted into applause after the judge announced the sentence. Many of the victims hugged and some of them broke down in tears.

Shortly before he received his sentence, Madoff offered an apology.

"I live in a tormented state for all the pain and suffering I created," Madoff said. "I left a legacy of shame. It is something I will live with for the rest of my life."

Turning to face some of his victims, he addressed them directly: "Saying I'm sorry is not enough. I turn to face you. I know it will not help. I'm sorry."

Madoff said he was not asking for forgiveness and not offering any excuses for his behavior.

"How can you excuse betraying thousands of investors?" he asked. "How can you excuse deceiving hundreds of employees? How can you excuse lying to and deceiving your wife who still stands by you?"

Victims had urged the judge to hand down the maximum life sentence against Bernard Madoff, the mastermind of the largest and most sweeping Ponzi scheme ever.

"We implore you to give the maximum sentence at a maximum prison for this deplorable low life," said one of the victims in court before Madoff spoke. "This is a violent crime without a tangible weapon."

Many of Madoff's investors were wiped out financially by the scam and sent letters to Judge Chin requesting he spend the rest of his life behind bars. Ten of the letter-writers spoke in court on Monday.

Speaking on behalf of his wife and looking at Madoff, one victim said, "I have a marriage made in heaven. You have [a] marriage made in hell, and that's where you'll return. May God spare you no mercy."

The 150-year sentence is the maximum that federal prosecutors in New York requested, based on the number of Madoff's victims, the amount of money he stole and the extent of the damage he caused. Judge Chin said that the Federal Department of Probation had recommended a 50-year sentence.

Madoff, who was stripped of his property in a legal action Friday, confessed on March 12 to running a massive Ponzi scheme. He pleaded guilty to 11 criminal counts, including fraud, money laundering, perjury, false filing with the Securities and Exchange Commission, and other crimes.

Lawyer Ira Lee Sorkin, who represents Madoff, asked for a 12-year sentence. In a letter to the judge, Sorkin explained that his 71-year-old client "has an approximate life expectancy of 13 years" and isn't likely to outlive the requested sentence by more than a year.

Madoff orchestrated the scam by masquerading his investment firm as a legitimate business. But the business became a front for a Ponzi scheme, in which the scammer uses fresh money from unsuspecting investors to make payments to more mature investors, creating the false appearance of legitimate returns.

Madoff sent statements to victims claiming that their investments had grown several times over, but in actuality he had stolen, not invested, their money. Investigators believe that he had been running his scam since at least the 1980s until he finally ran out of money in December 2008.

In a $170 billion legal judgment against Madoff, the government announced Friday it had seized all of his property in a deal that also forces his wife to give up homes and property worth millions. The value of all the assets will eventually be used to compensate -- or partially compensate -- victims, based on how much they invested in Madoff's firm.

The Securities Investor Protection Corporation, an organization that shields investors in brokerage firms, will also pay up to $500,000 for any eligible claimant who lost money to Madoff, based on how much they put in.

Thus far, federal investigators have identified 1,341 investors in Madoff's firm, who have losses exceeding $13 billion. They're still tallying the damage. Victims have until July 2 to file a claim with U.S. Bankruptcy Court in New York.

Since March, Madoff has been incarcerated in the Metropolitan Correctional Center in lower Manhattan, a holding facility for convicts awaiting sentencing. He will probably be transferred to a medium-security federal prison, according to prison consultants.

Alan Ellis, attorney and author of the "Federal Prison Guidebook," believes that Madoff will probably get sent to Federal Correctional Institute Otisville or FCI Ray Brook, both in upstate New York, FCI Fairton in New Jersey or FCI McKean in Pennsylvania.

--CNN's Michael Chernoff, Sara Lane, David Brandt, and Brian Vitagliano contributed to this report.

First Published: June 29, 2009: 9:37 AM ET

He got 150 years...........so what............ sad thing is he has lived his life lavishly off of other people's money and will probably only live 10 to 20 more years with meals, warmth, a roof over his head. However the people he screwed out of their money will live several years working, scraping, rebuilding for that life he took from them. Sometimes the justice system seems a tad backwards to me.

Inmate claims Madoff stowed $9 billion out of feds' reach[/i]
1 hr 40 mins ago [/i]

Did Bernie Madoff swindle the feds as well as his high-flying fund investors?

That's what Dan Mangan suggests in the New York Post today. According to a prison informant serving time with Madoff in the federal prison in Butner, N.C., the Ponzi schemer claims to have sequestered some $9 billion in ill-gotten investment gains prior to his arrest.

The unnamed inmate told the Post that Madoff has bragged openly that he funneled the money to three friends — and that his former partner, Frank DiPascali, knows the identities of the three secret billionaires. According to the source, Madoff mentioned that he suspects DiPascali — who pleaded guilty last year to helping Madoff fleece his investors — is using that information to cut a deal with the feds.

But could Madoff really manage to hide such a large sum of money from the army of auditors and investigators who've pored over his records? Or is he just telling fanciful tales to increase his profile in the joint? At least one financial journalist who followed the Madoff saga thinks it's unlikely that Bernie's lying.

"I think it's entirely plausible," John Carney, a senior editor at CNBC.com, told Yahoo! News. "Remember, he all but turned himself in. That means he had plenty of time to stash away assets overseas. I'd be shocked if he did not do this."

Mangan's prison informant also told him that Madoff became acutely depressed, and consumed with worries that his wife, Ruth, might take up with another man after a book revealed his long string of extramarital affairs. And to treat his condition, the inmate claims, Madoff sought therapy from the prison psychiatrist.

What's more, the informant claims that the injuries Madoff suffered in prison last year — commonly attributed at the time to a prison beatdown — actually arose from Madoff's own adverse reactions to a prescribed antidepressant.

"He looked really bad, really bad," the inmate told Mangan. "The buzz was he got beat up by a bunch of [Washington,] D.C. guys that were trying to extort money. He didn't get beat up."

Another inmate serving time with Madoff told New York Magazine's Steve Fishman the same thing last month, insisting that anyone who physically harmed Madoff — something of a "made" celebrity among the inmate population for the stunning scope of his crimes — in prison would face violent retribution. "If Bernie had gotten beat up," the convict told Fishman, "I would have done something about it."

But the inmate Mangan spoke to contradicted an inmate quoted in Fishman's piece who alleged that Madoff was unrepentant for his crimes, reportedly blurting out "f**k my victims" when asked if he felt remorseful.

"He knows he did wrong," Mangan's informant told the Post. "He also feels a lot of pain for what he did to people."

— Brett Michael Dykes is a national affairs writer for Yahoo! News.

http://news.yahoo.com/s/ynews/201006...NsawNwcmludA--