Madoff Rejected Plea Deal Including Conspiracy Charge

Mar 12 2009 | 2:14am ET

In a move likely to give rise to myriad conspiracy theories, Bernard Madoff is willing to admit that he ripped investors off to the tune of billions of dollars—and face spending the rest of his life in prison—but he is not willing to admit that he had help doing so.

Negotiations between Madoff’s lawyers and federal prosecutors over a plea deal in the alleged $50 billion Ponzi scheme case broke down over Madoff’s refusal to plead guilty to conspiracy, Bloomberg News reports. If he had, he likely would have had to finger his co-conspirators. Among the candidates mentioned—although none have been charged, and some have categorically denied involvement—as participating in the scam are Madoff’s brother and sons, who all worked at Bernard L. Madoff Investment Securities, Madoff’s wife, Ruth, firm CFO Frank DiPascali, and David Friehling, the auditor that signed off on the firm’s books.

Last week, prosecutors had finally had enough, and decided to proceed with 11 counts against Madoff—but no charge of conspiracy. Madoff is expected to plead guilty to all of the charges today, and faces as much as 150 years in prison.

The lack of a conspiracy charge indicates that investigators have yet to find any evidence than someone else worked hand-in-hand with Madoff on the fraud. Madoff’s refusal to play ball with prosecutors means that he will not cooperate with investigators in the ongoing investigation. But those investigators and prosecutors still think he had help, and are continuing the probe. Should they find the evidence they require, a conspiracy charge could be brought later, both against Madoff and any alleged co-conspirator.

In the criminal information filed against Madoff on Monday, prosecutors made clear they don’t think he acted alone, accusing Madoff of ordering his employees to create phony documents and financial statements for his investment advisory business, the site of the allegedly massive fraud.

Madoff has remained free on $10 million bail since his arrest in December. At today’s hearing, U.S. District Judge Denny Chin will decide whether to accept Madoff’s plea and whether to send Madoff to prison right away. His sentencing will come at a later date.

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