Madoff pleads guilty to all charges
NEW YORK - Bernard Madoff pleaded guilty Thursday to all 11 felony charges brought by prosecutors in one of Wall Street’s largest investment swindles, telling the court he is “deeply sorry and ashamed” for his actions.
U.S. District Judge Denny Chin accepted Madoff’s guilty plea and said he plans to jail Madoff until sentencing takes place June 16, meaning he will not be allowed to await sentencing in his $7 million Manhattan penthouse. Madoff’s crimes could result in a maximum prison term of 150 years.
“I cannot adequately express how sorry I am for what I have done,” Madoff told the court Thursday, admitting that for many years he had operated a Ponzi scheme. He added that he is “painfully aware” that he has “deeply hurt many many people.”
Madoff’s guilty plea marks the first time Madoff has spoken publicly about the scheme. Reading a statement in the courtroom, Madoff said he knowingly gave false testimony under oath to securities regulators. He also said he concealed his fraud by submitting audited reports to the SEC.
Madoff, 70, faces the prospect of coming face to face for the first time since his December arrest with some of the thousands of investors whose accounts prosecutors say he oversaw since at least the 1980s.
Judge Chin gave investors present in the court a chance to challenge his conclusion whether to accept a guilty plea to securities fraud and perjury, among other charges.
Madoff entered the courtroom for his plea hearing shortly before 10 a.m. ET. But victims of his Ponzi scheme began arriving at court as early as 8 a.m., two hours before the hearing was scheduled to begin.
Adriane Biondo, 41, of Los Angeles, said five members of her family were affected by the fraud, including elderly relatives who were ruined. She went to court to see Madoff plead guilty and wants the judge to send him to prison immediately.
“For him to be under penthouse arrest at this point ... is just not fair,” she said.
Madoff’s current bail status “really infuriates everyone,” said Matt Weinstein, a motivational speaker who lost the bulk of his savings in the scheme.
“People can’t even afford rent anymore,” Weinstein said. “He can’t go on in this palace of denial.”
In three months, Madoff has gone from a man known mostly as a pioneer of electronic trading in securities to an icon for disreputable money managers who live a life of affluence while fleecing those who entrust their life savings to their schemes.
The FBI claimed Madoff admitted to his sons months ago that his once-revered investment fund was all a big lie, a $50 billion Ponzi scheme that wiped out life fortunes, school trusts and charities and apparently pushed at least two investors to commit suicide.
The size of the scandal has made him an international symbol of greed and deception in difficult economic times. But it remains in dispute.
Prosecutors filed papers Tuesday saying Madoff’s investment company reported a total balance of $64.8 billion in November even though it actually had only a small fraction of that amount.
Investigators say the true amount lost by investors may be between $10 billion and $17 billion and the larger estimates by Madoff include the false profits prosecutors say he generated with tens of thousands of bogus account statements cataloguing steady profits.
So far, authorities have located only about $1 billion in assets.
In a hearing Tuesday, the judge said he had been contacted by clients of Madoff’s investment firm who complained — mistakenly — that he was benefiting from a plea deal. Prosecutors said there was no agreement that would have given him a shot at a lighter sentence in exchange for cooperating with investigators.
“There is no plea bargain here,” the judge said.
Despite the plea, investigators say they still would face the daunting task of unraveling how Madoff pulled off the fraud for decades without being caught. They suspect his family and his top lieutenants, who helped run his operation from its midtown Manhattan headquarters, may have been involved.
In court documents, prosecutors have indicated that low-level employees were in on the scam and may be cooperating.
Court papers say Madoff hired many people with little or no training or experience in the securities industry to serve as a secretive “back office” for his investment advisory business.
Prosecutors say he generated or had employees generate tens of thousands of account statements and other documents, operating a massive Ponzi scheme, a scam in which people are persuaded to invest in a fraudulent operation that promises unusually high returns.
The money Madoff received was never invested but was used by him, his business and others or, as occurs in Ponzi schemes, was paid out to early investors, prosecutors said.