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Posts Tagged ‘Bernard Madoff’

Madoff Sentenced To 150 Years In Prison

TOM HAYS and LARRY NEUMEISTER | June 29, 2009 01:46 PM EST | AP

Via HuffPo

NEW YORK — Convicted Wall Street swindler Bernard Madoff was sentenced to 150 years in prison Monday for a fraud so extensive that the judge said he needed to send a message to potential imitators and to victims who demanded harsh punishment.

Scattered applause and whoops broke out in the crowded Manhattan courtroom after U.S. District Judge Denny Chin issued the maximum sentence to the 71-year-old defendant, who said he lives “in a tormented state now, knowing all the pain and suffering I’ve created.”

Chin rejected a request by Madoff’s lawyer for leniency and said he disagreed that victims of the Ponzi scheme were seeking mob vengeance.

“Here the message must be sent that Mr. Madoff’s crimes were extraordinarily evil and that this kind of manipulation of the system is not just a bloodless crime that takes place on paper, but one instead that takes a staggering toll,” Chin said.

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A ‘sorry and ashamed’ Bernard Madoff pleads guilty

AP/Yahoo

By LARRY NEUMEISTER and TOM HAYS, Associated Press Writers

1 min ago

NEW YORK – Bernard Madoff pleaded guilty Thursday to charges that he carried out an epic fraud that robbed investors around the world of billions of dollars, admitting he began operating a giant Ponzi scheme in the early 1990s in response to a recession.

“I am actually grateful for this opportunity to publicly comment about my crimes, for which I am deeply sorry and ashamed,” he told U.S. District Judge Denny Chin.

He said that he started the fraud but that he believed it would be short and he could extricate himself.

“As the years went by, I realized my risk, and this day would inevitably come,” he said in a steady voice. “I cannot adequately express how sorry I am for my crimes.”

The fraud turned a revered money man into an overnight global disgrace whose name became synonymous with the current economic meltdown.

Madoff described his crimes after he entered a guilty plea to all 11 counts he was charged with, including fraud, perjury, theft from an employee benefit plan, and two counts of international money laundering.

Prosecutors say the disgraced financier, who has spent three months under house arrest in his $7 million in Manhattan penthouse, could face a maximum sentence of 150 years in prison at sentencing.

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 was in the billions of dollars. Since his arrest in December, the scandal has turned the 70-year-old former Nasdaq chairman into a pariah who has worn a bulletproof vest to court.

The scheme evaporated life fortunes, wiped out charities and apparently pushed at least two investors to commit suicide. Victims big and small were swindled by Madoff, from elderly Florida retirees to actors Kevin Bacon and Kyra Sedgwick and Nobel Peace Prize winner Elie Wiesel.

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Is Madoff Probe Expanding?

Bernard Madoff is set this week to plead guilty to orchestrating a massive Ponzi scheme. But could we be in line for more guilty pleas before this is all over?

The Daily Beast reports:

[T]he [Madoff] investigation … has broadened to include a number of suspected co-conspirators, according to federal officials involved in the case.

The Daily Beast story — written by Lucinda Franks, whose byline identifies her as a Pulitzer-Prize winning journalist who was formerly on the staff of the New York Times — also reports that, according to sources, “several members of Madoff’s inner circle transferred assets to their wives, transactions thought to be laundered through an English bank.”

There are said to be three groups of possible co-conspirators, who could potentially be charged either criminally by the Justice Department, or civilly by the SEC.

In the first group are employees of Madoff’s firm who concocted false trades and sent out phony statements to thousands of unsuspecting clients.The second group is comprised of principals in feeder funds such as Cohmad Securities Corp. and Fairfield Greenwich Group, which funneled investor dollars to Madoff and received large fees for steering this business. If they were aware of Madoff’s fraud, they could face criminal charges; if they were not, they could be hit with civil charges for a lack of due diligence.

The third group is the target of an investigation that’s still in its early stages into money laundering through British banks, in which US and British authorities are cooperating. This group consists of solicitors, accountants, and others in London who may have assisted Madoff in transferring funds from client accounts to a Madoff entity that lists Ruth Madoff, brother Peter Madoff, and sons Mark and Andrew Madoff among its board members.

It’s not clear from any of this that any specific members of Madoff’s family, or his inner circle, are in immediate legal jeopardy.

But the Wall Street Journal appears to be thinking along similar lines (sub req). It notes:

Prosecutors alleged Tuesday that Mr. Madoff hired numerous employees with “little or no prior pertinent training or experience in the securities industry” and caused them to “communicate with clients and generate false and fraudulent documents.”

Its report doesn’t go as far as the Daily Beast‘s. The Journal says it’s still unclear whether prosecutors believe these people knew they were involved in a fraudulent scheme, and doesn’t explicitly say that the investigation has broadened beyond Madoff himself.

But it’s noticeable that the paper does take the time to lay out what’s known about the possible involvement in the scheme of five of Madoff’s relatives and associates — including his wife Ruth, who has hired her own lawyer, and his brother Peter, who was the chief compliance officer for Madoff’s firm.

With Madoff’s guilty plea soon to be safely in the bag, are these reports an indication of where prosecutors are going next?

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Report: Mrs. Madoff Withdrew $15 Million Days Before Bernie’s Arrest

Reuters reports:

Massachusetts’ top securities regulator said on Wednesday that the wife of accused financial swindler Bernard Madoff took out roughly $15 million from an account managed by Cohmad Securities days before her husband was arrested and charged with securities fraud.

More as we get it…

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Madoff Victims List Released: See The Full List

Huffington Post |  Nicholas Sabloff   |   February 4, 2009 08:15 PM

A 162-page document containing the full list of people and companies that invested with Bernard Madoff’s firm was released Wednesday in a court filing. The list was compiled by AlixPartners of Dallas, Texas.

More specifics on the document’s contents from the New York Times’ Dealbook blog:

The list includes anyone who responded to advertisements placed by the trustee overseeing the bankruptcy of the firm. Not every name on the list is necessarily a victim of Mr. Madoff’s reputed $50 billion Ponzi scheme, but the list includes “everyone who might have an interest in the bankruptcy case,” according to a person briefed on the document.
The list includes trading partners and other customers that have accounts with the brokerage arm of Mr. Madoff’s firm and the investment management division.

SEE THE FULL LIST AND MORE HERE


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What Happened To Madoff’s Money?

Almost since the news broke that Bernard Madoff had confessed to running a “$50 billion Ponzi scheme”, one of the key unanswered questions has been, what happened to all that money?

The short answer is, we don’t know yet. “It is still too early to say with any certainty what was going on inside Madoff’s business,” said Stephen Harbeck — who heads the SIPC, which is serving as the receiver for Madoff’s now-defunct brokerage firm — at a press conference outside U.S. bankruptcy court last week.

It’s worth noting at the outset that the $50 billion figure, which came from the SEC complaint quoting Madoff’s own confession, may be inflated. The Associated Press has calculated that investors cumulatively have said they have lost $30 billion.

That’s not exactly pocket change. And despite Madoff’s lavish lifestyle, it would be virtually impossible for him to have blown through that amount, or even a significant fraction of it, on his own or his family’s personal expenses.

Madoff has promised to give an accounting of all his assets by the end of the year. But until the legions of forensic accountants with the FBI, the SEC, and other investigative bodies complete their enormous task of independently tracing the funds, we’ll likely remain largely in the dark.

Still, piecing together various reports, several possible answers are beginning to emerge, which, taken together, may go some way to explaining the mystery.

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Madoff’s Ponzi Scheme Could Cost IRS $17 Billion In Lost Tax Revenue

RACHEL BECK | December 18, 2008 08:09 PM EST | AP

NEW YORK — Even Uncle Sam may get burned by Bernard Madoff.

Investors who lost their fortunes in Madoff’s alleged Ponzi scheme will end up paying far less in taxes and may even be eligible for refunds, according to accounting experts.

By some estimates, the Internal Revenue Service could be out as much as $17 billion in lost tax revenue.

“This is one more thing federal, state and local officials will have to deal with,” said John Berrie, a tax partner at the law firm Bryan Cave in New York City. “It’s another heavy box on their back.”

In addition, investors may be counting on a federally mandated insurance fund to bail them out, but that program lacks the money to pay for all the claims that are likely to come.

The timing couldn’t be worse. Unemployment has surged, meaning fewer workers are paying payroll taxes. And housing prices have dropped, reducing property taxes.

The recession so far has cost the federal government $200 billion in tax revenues for the 12 months that ended in November, according to estimates by Moody’s Economy.com.

The Madoff case, which reportedly involves $50 billion, adds another layer to the fiscal crisis gripping the nation.

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