Madoff Pleads Guilty in Wall Street Swindle
Judge Denny Chin of Federal District Court in Manhattan revoked bail and ordered Madoff to jail after the plea. Applause broke out in the courtroom at the announcement, according to the Associated Press.
Judge Chin also set Madoff’s sentencing hearing for June 16. He said that Madoff, 70, has the means to flee and an incentive to do so because of his age.
Madoff arrived at court Thursday as crowds of onlookers and news crews gathered to watch the former head of an investment fund plead guilty of running a giant Ponzi scheme dating back two decades.
In his plea, Madoff admitted to securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the Securities and Exchange Commission and theft from an employee benefit plan.
Madoff told the judge he was deeply sorry for his scheme, which he said began in the early 1990s in response to a recession, the AP reported.
He spoke steadily in court as he addressed the judge before his guilty plea was accepted.
“I am actually grateful for this opportunity to publicly comment about my crimes, for which I am deeply sorry and ashamed,” he said.
“As the years went by, I realized my risk, and this day would inevitably come. I cannot adequately express how sorry I am for my crimes.”
Madoff did not look at the three investors who spoke at the hearing, even when one turned toward him and tried to address him.
George Nierenberg, the first of the three investors to speak, approached the podium glaring at Madoff, then said in the financier’s direction: “I don’t know if you had a chance to turn around and look at the victims.”
At the hint of a confrontation, a marshal sitting behind Madoff rose, and the judge directed Nierenberg to speak directly to the bench.
The plea does not end the saga: Investigators are still trying to unravel how he pulled off the fraud for decades without being caught. They suspect that his family and top lieutenants who helped run his operation from its midtown Manhattan headquarters may have been involved.
Madoff’s plea was absent a cooperation agreement that would have required him to name potential co-conspirators. But in court documents, prosecutors have indicated that low-level employees were in on the scam and may be cooperating.
Loud laughter erupted among some of the more than 100 spectators crammed into the large courtroom on the 24th floor of the federal courthouse in lower Manhattan. The judge warned the spectators to remain silent.
The fraud turned a revered money man into an overnight global disgrace whose name became synonymous with the current economic meltdown.
The plea came three months after the FBI claimed Madoff admitted to his sons that his once-revered investment fund was all a big lie — a Ponzi scheme that took in billions of dollars. Since his arrest in December, the scandal has turned the former Nasdaq chairman into a pariah who has worn a bulletproof vest to court.
He will face up to 150 years in prison, as well as financial restitution that the government has estimated at $170 billion. When Madoff was arrested, his customers had fraudulent statements showing assets of nearly $65 billion. So far, investigators have only been able to recover about $1 billion in assets, but they are continuing to look.
“Since we believe that all of the assets that the business had were purchased with stolen money, we would argue that all of the proceeds from it — down to selling the paper clips on the desks — should be customer property,” Stephen Harbeck, the chief executive of the government agency overseeing the liquidation of the business, told the New York Times.
His investors included hedge funds, banks, Jewish charities, the wealthy and small individual investors in North and South America and Europe. The scheme evaporated life fortunes, wiped out nonprofit groups and apparently pushed at least two investors to commit suicide. Victims also included actors Kevin Bacon and Kyra Sedgwick and Nobel Peace Prize winner Elie Wiesel.