The Work

March 12, 2009 1:12 PM

Madoff Pleads Guilty; Judge Chin Revokes Bail

Posted by Brian Baxter

UPDATE: 3/12/09 at 4:30 p.m.

After a morning of live blogging from the Daniel Patrick Moynihan Courthouse, we're still digesting the Bernard Madoff proceedings that played out before U.S. district court judge Denny Chin. (Links to our blog posts from this morning are available at the bottom of this post.)

We left the courthouse at nearly 11:30 a.m., unsure of whether Madoff had been handcuffed as he was led out of the courtroom and headed to prison. Our colleague Mark Hamblett from the New York Law Journal confirmed that Madoff was indeed handcuffed after Chin adjourned the plea hearing; he was led out of the courtroom through a side door by U.S. Marshals.

Interestingly, none of Madoff's family members, including his wife, Ruth, appeared to be at Thursday's hearing, Hamblett told us.

"Completing his surrender in the biggest Ponzi scheme in history, the 70-year-old Mr. Madoff confronted a courtroom filled with angry investors and kept a poker face as he pleaded guilty to 11 felonies before being slapped into handcuffs," Hamblett writes in his coverage of the hearing for the New York Law Journal. "It was only during his allocution before [Judge Chin] that Mr. Madoff displayed any emotion or indication the pressure was getting to him."

Hamblett writes that Madoff's eyes twitched repeatedly as he recited the details of the crimes he said had left him "so deeply sorry and ashamed."

Outside the courthouse, reporters flocked to Madoff victims looking to recount their experiences investing with a man they once trusted with their assets. (The New York Times has an interview with Phillips Nizer bank litigation partner Helen Chaitman, who says she lost her life savings with Madoff.)

DewittBaker The Am Law Daily joined a small army of reporters surrounding 84-year-old DeWitt Baker, pictured here, as he exited the federal courthouse on Worth Street. Baker and his wife lost more than $1 million by investing with Madoff.

Asked if he expected to get their money back, Baker said, "No, but we'll get at least some [money] from SIPC. We're lucky in that we're not out on the street, because there are so many other people that are."

Baker also lashed out at the IRS, which he said "took in billions over the years" by taxing phantom income by Madoff investors. He also criticized the SEC for failing to uncover the fraud. Then Baker turned his ire to the man of the hour--Madoff.

"I don't think he has a sincere bone [in his body]," said Baker when asked about Madoff's courtroom apology. "I think he's a psychopath."

So what does Madoff face in terms of prison time?

As previously reported, he faces a maximum sentence of 150 years in prison.

The breakdown, as stated by Judge Chin this morning, is listed below. As the judge emphasized repeatedly in court, he won’t make a decision on Madoff’s potential sentence until after he receives a pre-sentencing memo from prosecutors.

There's also a chance that Madoff could be sentenced by Chin in June and begin cooperating with the government after that time. That leaves open the opportunity for prosecutors to petition Chin for a reduced sentence for Madoff at some point in the future, depending upon his level of cooperation.

That means the Bernard Madoff saga will continue indefinitely in the interim.

Counts-Maximum Sentences

Count 1: Securites Fraud
Maximum 20-year sentence, $5 million fine or twice the gross gain or two times the pecuniary loss from criminal activity. Also consists of three years supervised release. (Note: all of the counts listed below carry with them three years supervised release and the restitution caveats for twice the gross gain or pecuniary loss from criminal activity.)

Count 2: Investment Advisor Fraud
Maximum five-year sentence, $10,000 fine.

Count 3: Mail Fraud
Maximum 20-year sentence, $250,000 fine.

Count 4: Wire Fraud
Maximum 20-year sentence, $250,000 fine.

Count 5: International Money Laundering
Maximum 20-year sentence, $500,000 fine.

Count 6: Second Count of Money Laundering
Maximum 20-year sentence, $500,000 fine.

Count 7: Third Count of Money Laundering
Maximum 10-year sentence, $250,000 fine.

Count 8: False Statements
Maximum 10-year sentence, $250,000 fine.

Count 9: Perjury
Maximum five-year sentence, $250,000 fine.

Count 10: False SEC Filings
Maximum 20-year sentence, $5 million fine.

Count 11: Theft from Employee Benefit Plan
Maximum five-year sentence, $250,000 fine.

Live Blogging the Madoff Hearing:

Bail Revoked, Madoff Remanded - 3/12/09, 11:23 a.m.

Plea Accepted, The Investigation Will Continue - 3/12/09, 11:09 a.m.

The Victims Speak - 3/12/09, 10:59 a.m.

"Guilty" to All 11 Counts - 3/12/09, 10:51 a.m.

"I knew what I was doing was wrong and criminal" - 3/12/09, 10:40 a.m.

The Prosecutors Enter and Madoff Says He's Ready to Plead Guilty - 3/12/09, 10:13 a.m.

Bernie Makes His Entrance - 3/12/09, 9:56 a.m.

Waiting for Bernie - 3/12/09, 9:40 a.m.

The Circus in Foley Square - 3/12/09, 9:30 a.m.

Photo by Brian Baxter / The Am Law Daily

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O Danny Boy
WilliamBanzai7 Blog

Oy Bernie boy, a Ponzi you've been a scheming
From Palm Beach up to Park Avenue
The good times are gone, and all your clients are steaming
'Tis you, 'tis you must to the big house go and we all must watch and smile
But come ye back after the judge has read the sentencing memo
And when the court room's hushed to hear how long you'll go
'Tis we'll be here lurking in the shadows
Oy Bernie boy, oy Bernie boy, we hate you so.

And if you come, when all the other dodgy Wall Street hedge funds are dying
And their NAVs are red as red well may be
You'll come and find the place where all asset managers are lying
And kneel and say an "Alpha" there for me.

And the markets shall hear, tho' soft you tread above
And all those Wall Street Ponzi schemes will warm and sweeter be
If you'll not fail to tell the judge about foolish human greed
We'll simply sleep in peace until the next big Ponzi scheme is seen.

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