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Madoff Sentenced to 150 Years in Prison for Ponzi Scheme

June 29, 2009 at 4:25 PM EDT
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Disgraced financier Bernard Madoff was sentenced Monday to 150 years in prison after pleading guilty in March to defrauding investors out of as much as $60 billion. Ray Suarez talks to New York Times reporter Diana Henriques about the day in court.
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TRANSCRIPT

JUDY WOODRUFF: Now the sentencing of Bernard Madoff for the largest Ponzi scheme in history.

The presiding judge told the convicted money manager today that his crimes were “extraordinarily evil” and sentenced him to 150 years in jail. Madoff, who defrauded investors in a scheme totaling tens of billions of dollars, apologized to victims in the courtroom. He told them, quote, “I made a mistake, and I know that doesn’t help you.”

He also said, “I cannot offer you an excuse for my behavior. How do you excuse betraying thousands of investors who entrusted me with their life savings?”

Those words were of no comfort to a large crowd of investors gathered outside the courthouse today.

MICHAEL DEVITA, Madoff victim: This is the biggest crime in the history of the universe, and he should be punished accordingly. This is a man who stole $65 billion. Nobody else has ever come close to $65 billion in theft. He has absolutely no remorse.

BURT ROSS, Madoff victim: It’s a solemn moment. I think that our judicial system, we have a right to be proud of it. It was handled with dignity, and justice was done. This has nothing to do with revenge or vengeance. This is a crime of historical proportions, and he was meted out justice, and that’s fair.

Inside the courtroom

Diana Henriques
New York Times
[Madoff's] statement was much more emotional than the kind of clinical recital of facts that he gave at the hearing in March. But as you noted, Ray, it had little comfort for the victims who were there to see him sentenced.

JUDY WOODRUFF: Ray Suarez has more about today's hearing and the hunt for any money in the case.

RAY SUAREZ: And for that, I'm joined again by Diana Henriques of the New York Times. She's been covering the Madoff case and is working on a book about the story.

And, Diana, pictures from outside the courtroom were flashed around the world. Take us inside the federal courthouse. What was the scene like in there as the crowd got settled for the sentencing?

DIANA HENRIQUES, New York Times: Well, it was conducted not in Judge Chen's usual chambers, but in the ceremonial courtroom, in the new federal courthouse in lower Manhattan, which is quite a soaring and impressive setting, a two-story ceiling, lots of shiny wood paneling and thick carpeting, and beautiful drapes, and lovely touches.

There was something very stately and grand about the setting. And, needless to say, it was packed with Mr. Madoff's victims, curious attorneys. There was a whole squadron of people from the U.S. attorney's office and the FBI sitting at their side of the courtroom.

And then, at the right-hand side of the courtroom, as I'm facing the judge, was the table for Mr. Madoff and his defense team. Mr. Madoff entered the courtroom looking a good deal thinner than he did when I saw him at the sentencing hearing in March, wearing a similar charcoal suit and cream-colored shirt and a navy tie.

His statement was much more emotional than the kind of clinical recital of facts that he gave at the hearing in March. But as you noted, Ray, it had little comfort for the victims who were there to see him sentenced.

RAY SUAREZ: When he was given his opportunity to speak to the court, did Bernard Madoff try to insulate other people who may be suspected of being involved in his crime?

DIANA HENRIQUES: Well, he did, in a kind of convoluted way. You folks cited his opening trope in his statement. How do you excuse stealing from victims who've trusted you?

He went on in that vein. How do you excuse lying to the brother who helped you build your firm, lying to the 200 employees who worked for you, lying to the wife who has stood by you for 50 years and is still standing by you?

So he went through a litany of people that he said he had betrayed by this crime, and they included employees and members of his family who, as you say, have come under great public vilification, although to date no criminal charges at all have been brought against any member of the family or any other Madoff employee.

Victim statements

Diana Henriques
New York Times
Not one of [Madoff's victims] could make it through the statement without choking on tears or having to stop to collect themselves. They told stories of lost college dreams, of retirement hopes perhaps forever deferred, homes that had to be sold.

RAY SUAREZ: A small group of Bernard Madoff's victims were also allowed to speak in court today. What did they have to say?

DIANA HENRIQUES: Oh, it was so moving, Ray. Not one of them could make it through the statement without choking on tears or having to stop to collect themselves.

They told stories of lost college dreams, of retirement hopes perhaps forever deferred, homes that had to be sold. One desperate woman said that she is making ends meet on food stamps and scavenging for food in dumpsters at the end of the month and grows frightened that she won't be able to meet her basic needs.

It was a moment of raw emotion, and the victims were extraordinarily eloquent, but extremely moved and upset to have to recount what had happened to them.

RAY SUAREZ: Was there any reaction in the courtroom when Judge Chin pronounced sentence at 150 years?

DIANA HENRIQUES: There was. Now, he had indicated it was a largely symbolic sentence, but he thought symbolism was important, he said. And one of the measures that justified that symbolism was giving a measure of justice to the victims.

When he pronounced the 150 years, there was a very brief spurt of applause. He runs a tight ship. They knew it couldn't last long, and it stopped almost immediately, but it was almost as if they could not have sat silent.

A 'remarkable' sentence

Diana Henriques
New York Times
No one keeps careful track of these things going back centuries, but most people think it's a pretty historic sentence.

RAY SUAREZ: In laying down a sentence of a century-and-a-half, does Judge Chin and the prosecution risk Bernard Madoff's cooperation in figuring out where whatever money is left is and who should get a piece of it?

DIANA HENRIQUES: Well, lawyers are debating that today because of this remarkable sentence, which is almost unprecedented in white-collar crime annals. No one keeps careful track of these things going back centuries, but most people think it's a pretty historic sentence.

On the one hand, people suggest, as you do, that this would be a deterrent, that he has nothing to gain in helping or cooperating any further to the degree that he's cooperated so far.

But other lawyers suggested to me this afternoon that maybe just the opposite would be true, that he would try now harder to cooperate and to implicate others and to explain what really happened in an effort to mitigate this dreadful sentence.

RAY SUAREZ: This highly specialized work involved in unreeling these books, figuring out where the money comes from and where it went, who it's been paid to in the past, how's that been going so far?

DIANA HENRIQUES: Well, it's been going faster than you would think, given the condition of the records. As you say, there are thousands. They literally have to unroll what has happened because dozens of years' worth of customer records are on microfilm and have to be, you know, converted into digital technology where they can be searched.

So far, the trustee has advised the government that they've documented actual cash losses of more than $13 billion. This is employing records that go back just to 1996. The government asserts that that's barely halfway through the life of this crime, so they do expect more documented losses going forward.

Payments have begun to the victims from the Securities Investor Protection Corporation, victims who have a clear claim in that they invested more money than they took out, so they have a net loss in cash, are already starting to receive checks. More than 450 claims have been processed so far. There are 8,800 pending.

And some of those, particularly the longer-term customers, may have to wait a good while to find out what kind of compensation, if any, they're going to get.

RAY SUAREZ: What about those individuals and institutions that got paid by Bernie Madoff and perhaps got paid from what the law would call ill-gotten gains?

DIANA HENRIQUES: Well, the nature of a Ponzi scheme is, if they took money out, it was someone else's money. So the trustee has filed more than half-a-dozen lawsuits already trying to recover funds that were taken out of the Ponzi scheme by other investors in earlier years. He's claimed about $10.1 billion so far that he's trying to retrieve.

In addition, there have been lawsuits filed by the trustee against two large investors who withdrew money steadily over the years in the billions of dollars. One of them has been also sued by the Securities and Exchange Commission. And in both cases, the lawsuits argue that they knowingly steered people into what they must have known was not a legitimate investment opportunity.

RAY SUAREZ: Well, they're saying this will take years to unravel. Diana Henriques, thanks for joining us.

DIANA HENRIQUES: Glad to be here, Ray.