Bernard Madoff pleads guilty to 11 felonies

(AP) - Saying he was "deeply sorry and ashamed,"Bernard Madoff pleaded guilty Thursday to pulling off perhaps thebiggest swindle in Wall Street history and was immediately led offto jail in handcuffs

News 12 Staff

Mar 12, 2009, 11:19 PM

Updated 5,602 days ago


(AP) - Saying he was "deeply sorry and ashamed,"Bernard Madoff pleaded guilty Thursday to pulling off perhaps thebiggest swindle in Wall Street history and was immediately led offto jail in handcuffs to the delight of his seething victims.
Madoff, 70, could get up to 150 years in prison when he issentenced in June.
In refusing to let the disgraced financier remain free on bailuntil then, U.S. District Judge Denny Chin noted that Madoff hadthe means to flee and an incentive to do so.
The plea did not satisfy many investors who had hoped Madoffwould be forced to name any family members or others who helped himswindle them out of billions of dollars. He pleaded guilty to all11 charges against him - with no deal with prosecutors - meaning heis under no obligation to disclose names and tell authorities wherethe money went. He is not believed to be cooperating withprosecutors.
"I am actually grateful for this opportunity to publiclycomment about my crimes, for which I am deeply sorry and ashamed,"Madoff, speaking softly but firmly, said in his first publiccomments about his crimes since the scandal broke in earlyDecember.
DeWitt Baker, an investor who attended the hearing and said helost more than $1 million with Madoff, called it "fantastic" thatMadoff's bail was revoked but belittled the apology.
"I don't think he has a sincere bone in his body," said Baker,who added that prison time would be too good for Madoff. "I'dstone him to death."
Madoff did not look at any of the three investors who spoke atthe hearing, even when one turned in his direction and tried toaddress him.
The fraud, which prosecutors say may have totaled nearly $65billion, turned a well-respected investment professional - he wasonce chairman of the Nasdaq exchange - - into a symbol of WallStreet greed amid the economic meltdown. The public fury toward himwas so great that he was known to wear a bulletproof vest to court.
Madoff pleaded guilty to charges including fraud, perjury andmoney-laundering, telling the judge that the scheme began in theearly 1990s, when the country was in a recession and the market wasnot doing well.
"While I never promised a specific rate of return to anyclient, I felt compelled to satisfy my clients' expectations, atany cost," he said.
He said he accepted investors' money but didn't put it into themarket. Instead, he sent them phony account statements showing thatthey were making money. It was a Ponzi scheme, or a pyramid, inwhich early investors are paid off with money taken in from laterinvestors.
"When I began the Ponzi scheme I believed it would end shortlyand I would be able to extricate myself and my clients from thescheme," he said. "However, this proved difficult, and ultimatelyimpossible, and as the years went by I realized that my arrest andthis day would inevitably come."
Madoff implicated no one else, though investigators suspectrelatives and top lieutenants - perhaps Madoff's wife - may havebeen in on the scheme.
In Washington, White House spokesman Robert Gibbs said: "Thepresident is glad that swift justice will happen."
Gibbs said the Obama administration will do everything possibleto ensure strict enforcement of securities regulations "and hopethat through those actions that that kind of greed andirresponsibility and that kind of criminal activity never happensagain."
The financier, who has spent three months under house arrest inhis $7 million Manhattan penthouse, will be sentenced June 16. Inaddition to prison time, he faces fines, mandatory restitution tovictims and forfeiture of ill-gotten gains.
The plea came three months after the FBI claimed Madoff admittedto his sons that his once-revered investment fund was all a biglie.
The scheme wiped out people's fortunes, ruined charities andfoundations, and apparently pushed at least two investors to commitsuicide. Investors big and small were swindled, from Floridaretirees to celebrities such as Steven Spielberg, actor Kevin Baconand Hall of Fame pitcher Sandy Koufax.
Many of Madoff's victims were Jews and Jewish charities, whichtrusted in Madoff because he is Jewish. Those swindled includedNobel Peace Prize winner and Holocaust survivor Elie Wiesel.
Authorities said Madoff confessed to his family that he hadcarried out a $50 billion fraud. In court documents, prosecutorsput the amount at $64.8 billion. However, experts said that theactual loss was probably much less and that the higher numbersreflect the false profits Madoff told investors they were making.
So far, authorities have located only about $1 billion forswindled investors.
Helicopters circled above the courthouse before the hearing, andfederal officers with automatic weapons stood outside as Madoffarrived. Investors signed in before entering the 24th-floorcourtroom.
Richard and Cynthia Friedman came to get a glimpse of the manwho defrauded them of their life savings of $3 million. RichardFriedman, an accountant, noticed how well his clients were doingwith Madoff and began investing his own money in 1991. He learnedit was gone months before he had planned to retire - a plan now onhold.
"I wanted him to see some of the faces of the people he lied toand destroyed," said Cynthia Friedman, 59, of Jericho, N.Y.
After arguments began on whether Madoff should remain free onbail, his lawyer Ira Sorkin described the bail conditions and howMadoff had, "at his wife's own expense," paid for privatesecurity at his penthouse. Loud laughter erupted among some of themore than 100 spectators crammed into the large courtroom. Thejudge warned them to be quiet.
George Nierenberg, the first of the three investors to speak,approached the podium glaring at Madoff, then said in thefinancier's direction: "I don't know if you had a chance to turnaround and look at the victims."
At the hint of a confrontation, a marshal sitting behind Madoffstood up, and the judge directed Nierenberg to speak directly tothe bench.
The courtroom erupted in applause after the judge announcedMadoff would go directly to jail. As he was led out of court, aspectator yelled, "Hey, Bernie!" but was shushed by investors incourt and backed off.
Investigators are still undertaking the daunting task ofunraveling how he pulled off the fraud for decades without beingcaught.
Alleged Madoff victim from LI helps other victims
To watch an extended interview with an alleged Madoff victim from Huntington, go to Channel 612 in your iO digital cable box and select iO Extra.

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