Monday, 26 September 2016
Last updated 50 min ago
Jun 28 2012 | 3:33am ET
Bernard L. Madoff Investment Securities was very much a family business, employing the arch-fraudster's brother, sons and niece. But despite working to tie those kinsman to the $65 billion Ponzi scheme that sent Madoff to prison for 150 years for more than three years, authorities have so far failed to do so.
Until tomorrow, that is, when Madoff's brother, Peter, is expected to plead guilty to conspiracy and falsifying records.
Peter Madoff served as BLMIS' chief compliance officer and began working at the firm in 1965. Sued by the court-appointed receiver trying to recover money for Madoff's victims—the receiver, Irving Picard, accused the Madoffs of using the firm as a family piggy bank—he has consistently denied any wrongdoing, a denial backed up by his brother, who said that Peter and his own sons were surprised when his fraud collapsed in December 2008.
Under a plea deal with prosecutors, Peter Madoff has agreed to forfeit some $143.1 billion—the total amount of money that passed through BLMIS during his tenure—including his personal assets. In return, prosecutors have agreed to seek no more than 10 years in prison for the 66-year-old.
Peter Madoff will admit that he lied to investors about BLMIS' compliance effort, which Picard says was non-existent. He will also acknowledge that he made false statements about the business in his role as CCO in an allocution in New York federal court. But he will not admit to knowing about the fraud, merely that his failure to do his job allowed the scam to continue.
Peter Madoff will be the eighth person to plead guilty in the Madoff case. Five others have pleaded not guilty and are awaiting trial.