Peter Madoff Sentenced for Role in Brother’s Ponzi Scheme

by
Watch the The Madoff Affair, FRONTLINE’s investigation into the world’s first global Ponzi scheme.

Peter Madoff was sentenced to 10 years in prison on Thursday for his role in the multi-billion dollar Ponzi scheme orchestrated by his older brother, Bernie.

Madoff, 67, is the second person to be sentenced in the wide-ranging fraud, which was first discovered four years ago this month. Bernie Madoff is currently serving a 150-year sentence at a federal prison in North Carolina.

“I am deeply ashamed of my conduct,” Peter Madoff said at his sentencing yesterday. “I accept full responsibility for my actions.”

In June, Madoff, who worked as chief compliance officer at his brother’s investment firm, pleaded guilty to multiple charges, including falsifying records, tax fraud and conspiracy to commit securities fraud.

“Peter Madoff was a gatekeeper, who was supposed to guard against fraud, but instead enabled it — facilitating his brother Bernie’s breathtaking scheme by falsifying compliance records and lying to both regulators and clients,” said U.S. Attorney Preet Bharara following the sentencing.

Madoff insisted he never knew about the Ponzi scheme, and claimed he first learned about it just 36 hours before his brother’s arrest — a claim that Judge Laura Taylor Swain said was “frankly, not believable.” Madoff was also ordered to surrender all of his assets, which have been valued at approximately $143 billion. The arrangement “seals Peter Madoff’s financial ruination,” Swain said.

Madoff’s clients suffered cash losses of about $17.3 billion in the fraud, according to Irving Picard, the bankruptcy trustee working to recoup those funds. To date, Picard has recovered $9.3 billion while an additional $2.35 billion has been seized by federal prosecutors.

The Madoff brothers remain the only members of their family to face criminal charges in connection to the fraud. Criminal charges have been filed, however,¬†against an additional 12 defendants. Federal prosecutors have obtained guilty pleas from Frank DiPascali, who was Madoff’s chief financial officer, David Friehling, his former accountant, and five other former employees. Each are awaiting sentencing. Five other former employees have all pleaded not guilty and are awaiting trial.

Peter Madoff arrirves at Manhattan federal court for his sentencing, Thursday, Dec. 20, 2012, in New York. Madoff, the former senior compliance officer at the Madoff private investment business and brother of Bernard Madoff, pleaded guilty to conspiracy and falsifying books and records of an investment adviser in June. (AP Photo/ Louis Lanzano)

RELATED

blog comments powered by Disqus

In order to foster a civil and literate discussion that respects all participants, FRONTLINE has the following guidelines for commentary. By submitting comments here, you are consenting to these rules:

Readers' comments that include profanity, obscenity, personal attacks, harassment, or are defamatory, sexist, racist, violate a third party's right to privacy, or are otherwise inappropriate, will be removed. Entries that are unsigned or are "signed" by someone other than the actual author will be removed. We reserve the right to not post comments that are more than 400 words. We will take steps to block users who repeatedly violate our commenting rules, terms of use, or privacy policies. You are fully responsible for your comments.

SUPPORT PROVIDED BY

FRONTLINE on

ShopPBS
Frontline Journalism Fund

Supporting Investigative Reporting

Funding for FRONTLINE is provided through the support of PBS viewers and by the Corporation for Public Broadcasting. Major funding for FRONTLINE is provided by The John D. and Catherine T. MacArthur Foundation. Additional funding is provided by the Park Foundation, The Ford Foundation, the Wyncote Foundation, and the FRONTLINE Journalism Fund with major support from Jon and Jo Ann Hagler on behalf of the Jon L. Hagler Foundation.
PBSCPBMacArthur FoundationPark FoundationFord Foundationwyncote

FRONTLINE   Watch FRONTLINE   About FRONTLINE   Contact FRONTLINE
Privacy Policy   Journalistic Guidelines   PBS Privacy Policy   PBS Terms of Use   Corporate Sponsorship
FRONTLINE is a registered trademark of WGBH Educational Foundation.
Web Site Copyright ©1995-2014 WGBH Educational Foundation
PBS is a 501(c)(3) not-for-profit organization.