Wednesday, 22 February 2017
Last updated 18 min ago
Jun 29 2009 | 11:41am ET
Bernard Madoff, the mastermind of what is thought to be the largest Ponzi scheme in history, was sentenced to 150 years in prison, the maximum allowable under law.
U.S. District Judge Denny Chin imposed the sentence at a hearing in Manhattan federal court today, rejecting Madoff’s claims that he “has done all that he could do or told all that he knows.”
“The breach of trust was massive—individuals, charities, pension funds, institutional clients—were all repeatedly lied to,” Chin said. “Investors made important life decisions based on these fictitious account statements. Madoff also repeatedly lied to the SEC and other regulators by creating false documents to cover up his scheme.”
“This is not a bloodless financial crime that just takes place on paper, but one that takes an enormous human toll,” Chin went on. “Symbolism is important not only to send a message that individuals will be sentenced to the fullest extent under the law… but also for the victims.”
On Friday, Chin entered a preliminary forfeiture order against Madoff totaling $171 billion. At today’s hearing, he deferred restitution issues for 90 days.
Madoff admitted in December that he ran a $65 billion Ponzi scheme for almost 30 years. The news rocked the financial world, and hedge funds and their investors were among the hardest-hit. Madoff’s fraud is one of the major drivers of the current push for stricter financial regulation and tough new rules for hedge funds, both in the U.S. and in Europe.
“I cannot offer you any excuse for my behavior,” Madoff said. “How do you excuse deceiving an industry you helped to build? How do you excuse lying and deceiving thousands of investors? How do excuse lying and deceiving over 200 employees? How do you excuse lying and deceiving a wife of 50 years, who still stands by you?”
“Apologizing… is not enough,” he continued, for the first time looking at the victims seated behind him. “You should know I feel sorry for everything that I’ve done.”
“But there is nothing that I can do that will make your lives better,” he concluded.
Nine of Madoff’s victims addressed the court at today’s hearing before Madoff himself addressed the court. One blasted the SEC for allowing “a psychopath to steal from me and steal from the world.”
“I have lost my ability to care for myself in my old age,” Maureen Ebel said.
Another focused his vitriol on Madoff himself. “May God spare you no mercy,” he said, according to AmLaw Daily’s live-blog of the hearing. Still another blasted the fraudster for betraying his fellow Jews, with special approbation for his looting of famed Holocaust survivor Elie Wiesel’s charity, “as if Elie Wiesel hasn’t suffered enough.”
Several urged Chin to ensure that Madoff, who said he will live with the “pain” and “torment” of his scam for the rest of his life, does so behind bars.
“Every time he cashed a check, he killed dreams,” Michael Schwartz, whose trust fund was wiped out by the Madoff scam, said. “Your Honor, Bernard Madoff’s jail cell should become his coffin.”
“Your Honor, put this beast in a cage where it belongs,” the final victim to speak, Sheryl Weinstein, former CFO of the Jewish charity Hadassah, implored Chin in her last words to the court.
The hearing was held in the packed ceremonial courtroom, the largest in the lower Manhattan federal courthouse, and was being simulcast in two overflow rooms.
Madoff pleaded guilty in March to securities fraud, investment adviser fraud, adviser fraud, mail fraud, wire fraud, false statements, perjury, false filings with the Securities and Exchange Commission, theft from an employee benefit plan and three counts of money laundering, and has been jailed ever since. His lawyer, Ira Sorkin, asked for mercy for the 71-year-old fraudster, suggesting a 12-year-sentence. Sorkin conceded that his client is “a deeply flawed individual” at today’s hearing, and in a letter to Chin last week notes that Madoff has cooperated with investigators, a potential plea deal with prosecutors foundered over Madoff’s refusal to accept a conspiracy charge. Authorities still do no believe Madoff’s claim that he acted alone and are continuing their investigation into who may have helped him run the massive fraud.
Prosecutors had urged Chin to impose the maximum sentence. Chin said that the federal probation department were slightly more forgiving, suggesting a 50-year sentence for the arch-fraudster.
After Chin imposed the maximum, he agreed to recommend that to the Bureau of Prisons that Madoff serve his sentence somewhere in the Northeast.
Madoff’s wife, Ruth, who on Friday struck a deal with prosecutors that will allow her to keep $2.5 million in cash but forces her to give up her homes, was to address the court after Madoff’s sentencing.