Bernard Madoff went from a US$7 million penthouse to a tiny jail cell with cinderblock walls and linoleum floors after confessing he carried out what may be the biggest fraud in Wall Street history to escape the pain of the 1990s recession.
The change in lifestyle for the 70-year-old financier was welcomed on Thursday by angry investors who packed into a federal courtroom to watch Madoff plead guilty to cheating nearly 5,000 investors out of billions of dollars.
“I am painfully aware that I have deeply hurt many, many people, including the members of my family, my closest friends, business associates and the thousands of clients who gave me their money,” Madoff told US District Judge Denny Chin.
“I cannot adequately express how sorry I am for what I have done,” he said just before Chin ordered him to prison to await a June 16 sentencing when he will face up to 150 years in prison.
His lawyers filed a notice of appeal to a federal appeals court to get it to reconsider Chin’s decision.
Defense attorney Ira Sorkin said Madoff deserved to stay out because other high-profile financial criminals accused in multibillion-dollar frauds were not jailed until sentencing, but Chin disagreed, telling prosecutors he did not even need to hear their bail arguments.
“In light of Mr Madoff’s age, he has an incentive to flee, he has the means to flee, and thus, he presents a risk of flight,” Chin said.
Madoff said “guilty” repeatedly to 11 felony 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 pyramid 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 in his first public comments about his crimes since the US$65 billion scandal broke in early December after he confessed to his sons.
His Dec. 11 arrest turned a well-respected investment professional — Madoff was once chairman of the NASDAQ exchange — into a symbol of Wall Street greed amid the economic meltdown. The public fury toward him was so great that he sometimes wore a bulletproof vest to court.
The court appearance disappointed many Madoff investors, who hoped he would say who might have helped him pull off the scam and where the money went.
Because Madoff pleaded guilty without a deal with prosecutors, he is under no obligation to cooperate. Some legal experts and investors, like Judith Welling, have speculated that he is sacrificing himself to protect his wife, his family and friends.
“He’s trying to save the rest of his family,” Welling said. “We need to find out who else was involved, and we need, obviously, to freeze the assets of all those people involved to help the victims.”
Acting US Attorney Lev Dassin said in a statement that the government made no deal, “public or otherwise,” with Madoff over his plea, his sentence or whether it would pursue more charges against him.
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.
Prosecutors gave assurances they are investigating Madoff’s wife and other family members and employees to determine what role, if any, they played in the scam.
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