What comes around, goes around!

BERNARD L. MADOFF PLEADS GUILTY TO ELEVEN-COUNT CRIMINAL INFORMATION AND IS REMANDED INTO CUSTODY

Lev L. Dassin, the Acting U.S. Attorney for the Southern District of New York, Joseph M. Demarest Jr., the Assistant Director-in-Charge of the New York Field Office of the FBI, and Alan D. Lebowitz, the Deputy Assistant Secretary of the U.S. Department of Labor, Employee Benefits Security Administration (DOL-EBSA), today announced that Bernard L. Madoff pleaded guilty in Manhattan federal court to 11 felony counts related to a massive Ponzi scheme.

Madoff pleaded guilty before U.S. District Judge Denny Chin to securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the U.S. Securities and Exchange Commission (SEC), and theft from an employee benefit plan.

Madoff, 70, faces a statutory maximum sentence of 150 years in prison. He is also subject to mandatory restitution and faces criminal fines up to twice the gross gain or loss derived from the offense. Additionally, the criminal information to which Madoff pleaded guilty includes forfeiture allegations that would require Madoff to forfeit the proceeds of the charged crimes, as well as all property involved in the money laundering offenses and all property traceable to such property. The statutory maximum sentences for each of the charged offenses are set forth in an attached chart.

Judge Chin remanded Madoff into custody pending sentencing.

Judge Chin scheduled Madoff's sentencing for June 16, 2009, at 1:30 p.m.

Mr. Dassin praised the investigative work of the FBI and the DOL-EBSA. Mr. Dassin also thanked the SEC, the Securities Investor Protection Corporation and the Securities Investor Protection Act (SIPA) Trustee for their assistance.

"Today is one step in an ongoing investigation," Mr. Dassin said. "While we do not agree with all the assertions made by Mr. Madoff today, his admissions certainly establish his guilt. We are continuing to investigate the fraud and will bring additional charges against anyone, including Mr. Madoff, as warranted."

"Despite speculation to the contrary," Mr. Dassin added, "there is no agreement whatsoever, public or otherwise, between the government and Mr. Madoff about his plea, his sentence, or the filing of additional charges against him or anyone else."

Mr. Dassin also said, "We continue to trace money and restrain assets so that victims may recover the greatest possible amount on their losses. We have been working closely with the FBI, the DOL-EBSA, the SEC, and the SIPA Trustee since the outset of this investigation to achieve this goal, and we will continue to do so. However, because of the nature and length of the scheme, victims may recover only a small fraction of their losses."

Assistant U.S. Attorneys Marc Litt, Lisa A. Baroni, William J. Stellmach, Barbara A. Ward, and Sharon Frase are in charge of the prosecution.

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STATUTORY MAXIMUM SENTENCES – United States v. Bernard L. Madoff

Count

Charge

Maximum Penalties

ONE

Securities Fraud

20 years in prison; 3 years' supervised release; fine of the greatest of $5 million or twice the gross gain or loss from the offense; and restitution

TWO

Investment Adviser Fraud

5 years in prison; 3 years' supervised release; fine of the greatest of $10,000 or twice the gross gain or loss from the offense; and restitution

THREE

Mail Fraud

20 years in prison; 3 years' supervised release; fine of the greatest of $250,000 or twice the gross gain or loss from the offense; and restitution

FOUR

Wire Fraud

20 years in prison; 3 years' supervised release; fine of the greatest of $250,000 or twice the gross gain or loss from the offense; and restitution

FIVE

International Money Laundering to Promote Specified Unlawful Activity

20 years in prison; 3 years' supervised release; fine of the greatest of $500,000 or twice the value of the monetary instruments or funds involved, or twice the gross gain or loss from the offense; and restitution

SIX

International Money Laundering to Conceal and Disguise the Proceeds of Specified Unlawful Activity

20 years in prison; 3 years' supervised release; fine of the greatest of $500,000 or twice the value of the monetary instruments or funds involved, or twice the gross gain or loss from the offense; and restitution

SEVEN

Money Laundering

10 years in prison; 3 years' supervised release; fine of the greatest of $250,000 or twice the gross gain or loss from the offense; and restitution

EIGHT

False Statements

5 years in prison; 3 years' supervised release; fine of the greatest of $250,000 or twice the gross gain or loss from the offense; and restitution

NINE

Perjury

5 years in prison; 3 years' supervised release; fine of the greatest of $250,000, or twice the gross gain or loss from the offense; and restitution

TEN

Making a False Filing with the SEC

20 years in prison; 3 years' supervised release; fine of the greatest of $5,000,000 or twice the gross gain or loss from the offense; and restitution

ELEVEN

Theft from an Employee Benefit Plan

5 years in prison; 3 years' supervised release; fine of the greatest of $250,000, or twice the gross gain or loss from the offense; and restitution

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James A. Restucci is the author of this blog. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 Internal License.

4 Responses to What comes around, goes around!

  1. Avatarjimr says:

    Good, they need to, anyone regardless of who they are or how they are related, that profited from these schemes needs to be held accountable in my book.

  2. AvatarEagleWatch says:

    They’re going after the wife (Ruth) as I write, and I’m reasonably sure that his sons (securities traders who had no securities to trade) and brother (the compliance officer) will fall as well.

  3. AvatarLeland says:

    I don’t think that is enough. The fact of the matter is that people’s lives are ruined. Their retirement that they saved for and lost through no fault of their own just turned into life sentences as the greeters at Wal-Mart.

    I don’t have the answer, but I suspect it lies in making sure that his family suffers the same fate as those he bilked.

  4. AvatarEagleWatch says:

    Seventy-year-old Madoff facing up to 150 years reminds me of another judge (whose name escapes me at the moment) who sentanced another 70-year-old to a 25-to-life, whereupon the defendant looked surprised and said, “Your Honor, I can’t do twenty-five … I’m seventy years old!” The judge looked down and told him, “Just give me what you can.”

    I also wonder how much of this “deal” has to do with, not saving the government the $3 to $4 million of a trial, but the embarrassment of having just how much the SEC missed spelled out in open court.

    Just sayin’