about the confession in court by one of the worst criminals in history, who stole 65 billion dollars from people who trusted and respected him. But we still don’t know what really happened. We still don’t know how he kept this vast Ponzi scheme afloat for
, when you’d think that such a fraud would have to collapse after a year or two at most. It meant that month after month for twenty years, he had to keep receiving enough funds in new investments to pay the ever-increasing “dividends” due to all his existing investors including the new ones. Not just the deliberate, sustained evil of it, but the deliberate, sustained mechanics of it, seem uncanny.
Madoff Goes to Jail After Guilty Pleas
By Diana B. Henriques and Jack Healy
When Bernard L. Madoff entered a federal courtroom in Manhattan on Thursday to admit that he had run a vast Ponzi scheme that robbed thousands of investors of their life savings, he was as elegantly dressed as ever. But, preparing for jail, he wore no wedding ring—only the shadowy imprint remained of one he has worn for nearly 50 years.
He admitted his guilt for the first time in public, and apologized to his victims, dozens of whom were squeezed into the courtroom benches behind him, before being handcuffed and led away to jail to await sentencing.
“I knew what I was doing was wrong, indeed criminal,” he said. “When I began the Ponzi scheme, I believed it would end shortly and I would be able to extricate myself and my clients.”
But finding an exit “proved difficult, and ultimately impossible,” he continued, stumbling slightly in his prepared remarks. “As the years went by I realized this day, and my arrest, would inevitably come.”
Mr. Madoff acknowledged that he had “deeply hurt many, many people,” adding, “I cannot adequately express how sorry I am for what I have done.”
His testimony was shaped not only by expressions of regret, but also by his determination to shield his wife and family.
As a result, those who thought his guilty plea would shed more light on Wall Street’s biggest and longest fraud left the courtroom unsatisfied and uncertain—about where their money had gone and who may have helped Mr. Madoff steal it. Indeed, the hearing made clear that Mr. Madoff is refusing to help the government build a case against anyone else.
Repeatedly, Mr. Madoff insisted that the stock-trading business run by his brother and two sons was entirely legitimate and untainted by his crime. That contradicted the criminal charges against him and statements made in court by Marc O. Litt, the federal prosecutor handling the case, who asserted that at times Mr. Madoff’s firm “would have been unable to operate without the money from this scheme.”
Mr. Madoff also claimed his fraud began in the early 1990s, not in the 1980s, as the government contends—an assertion that seemed to be aimed at limiting how far back into the family business history the government can reach for restitution.
No family members have been accused of any wrongdoing and they all—Mr. Madoff’s wife, Ruth, his brother Peter and his sons, Mark and Andrew—have denied any knowledge of the fraud. But Mrs. Madoff is seeking to retain almost $65 million that she says are her own assets.
And when one of Mr. Madoff’s victims urged a public trial to shed more light on the crime, Mr. Litt promised that the government was vigorously investigating what had happened to the money and who else had been involved—questions that could have been answered by Mr. Madoff, then and there, if he were willing.
“Did we get answers? Not at all,” said George Nierenberg, an award-winning filmmaker, whose family lost most everything to Mr. Madoff.
Mr. Nierenberg was one of a handful of victims that Judge Denny Chin of Federal District Court allowed to speak at the hearing. As he went to the podium, he suddenly turned to the defendant and prodded him to “turn around and look at the victims.”
For a moment, a startled Mr. Madoff did look at Mr. Nierenberg, before Judge Chin warned Mr. Nierenberg to address the court, not the defendant. “What I saw was a hollow, empty man,” the filmmaker said later.
The inconsistencies between Mr. Madoff’s version and the government’s charges are evidence that no plea agreement could be reached, said Joel M. Cohen, a partner at Clifford Chance and a former federal prosecutor in Brooklyn.
“Clearly, he’s light-years away from being cooperative,” Mr. Cohen said after reviewing a transcript of the hearing. “Essentially, Madoff is saying, ‘I’ll plead guilty—but I’m not going to plead guilty to exactly what you say I did.’ “
But Thursday’s hearing probably is not the final forum for exploring Mr. Madoff’s crime, several former prosecutors and defense lawyers said. Typically, shortly before sentencing, the court conducts what is called a Fatico hearing, where the government and the defense lawyers try to resolve factual disputes remaining in the case.
“While we do not agree with all the assertions made by Mr. Madoff today, these admissions certainly establish his guilt,” said Lev L. Dassin, the acting United States attorney in Manhattan, in a statement after the hearing. “We are continuing to investigate the fraud and will bring additional charges against anyone, including Mr. Madoff, as warranted.”
The 11 counts of fraud, money laundering, perjury and theft to which Mr. Madoff, 70, pleaded guilty carry maximum terms totaling 150 years. Sentencing was scheduled for June 16.
After Mr. Madoff’s plea was accepted, his lawyer, Ira Lee Sorkin, tried to persuade Judge Chin to allow Mr. Madoff to remain free on bail, confined to his apartment on the Upper East Side, until he was sentenced.
Judge Chin promptly refused.
“He has incentive to flee, he has the means to flee, and thus he presents the risk of flight,” Judge Chin said. “Bail is revoked.”
Mr. Sorkin said later that he intended to appeal that decision.
Some of Mr. Madoff’s victims began to applaud that ruling before Judge Chin cautioned them to remain silent. As Mr. Madoff’s hands were cuffed behind his back, some victims pointed and nodded with satisfaction.
And as he was led out of the paneled courtroom into an antiseptic tiled hallway, at least two of his victims were in tears.
“They are tears of relief,” explained Norma Hill of Armonk, N.Y., who sat in the first row of the courtroom. “It was a very courageous stand that the judge took. It has restored my faith in the justice system.”
Behind her, another woman, Adriane Biondo, of Los Angeles, wept with anger. Her family’s devastating losses have left elderly relatives “sick with fear,” she said. “It’s emotional—120 cumulative years of hard work is gone.”
Raw emotion had been an undercurrent throughout the day, from the moment Mr. Madoff arrived at the courthouse, and was ushered into a 24th-floor courtroom that was already packed with lawyers and victims.
Mr. Madoff stood, was sworn in and reminded that he was under oath. Noting that he had waived indictment, Judge Chin asked, “How do you now plead, guilty or not guilty?”
“Guilty,” Mr. Madoff responded.
Mr. Madoff began to answer questions from Judge Chin about whether he understood the ramifications of his guilty plea.
At first, Mr. Madoff’s voice was barely audible as he answered the judge’s initial questions.
“Try to keep your voice up so that I can hear you, please,” Judge Chin said.
Finally, the judge said, “Mr. Madoff, tell me what you did.”
Mr. Madoff began: “Your honor, for many years up until my arrest on Dec. 11, 2008, I operated a Ponzi scheme through the investment advisory side of my business, Bernard L. Madoff Securities L.L.C.”
Mr. Madoff’s fraud became a global scheme that ensnared hedge funds, charities and celebrities. He enticed thousands of investors, including figures like Senator Frank Lautenberg of New Jersey, the Hall of Fame pitcher Sandy Koufax and a charity run by Elie Wiesel, the Nobel Peace Prize laureate.
The fraud’s collapse erased as much as $65 billion that his customers thought they had. It remains unclear how much victims will recover.
A court-appointed trustee liquidating Mr. Madoff’s business has so far been able to identify only about $1 billion in assets to satisfy claims.
