Madoff faces life in prison on 11 criminal charges

NEW YORK, (Reuters) – Bernard Madoff, accused of  an “unprecedented” $50 billion financial swindle, was charged  yesterday with 11 criminal counts that could put him in prison  for the rest of his life.

Bernard Madoff
Bernard Madoff

Madoff, 70, a former Nasdaq stock market chairman and money  manager, is expected to plead guilty on Thursday, his lawyer  said.

U.S. prosecutors provided new details of the alleged fraud  in court papers, saying Madoff’s crime spree lasted from “at  least” the 1980s.

The government said in court documents it wants Madoff to  forfeit all of the money and property that can be traced back  to the alleged fraud — a sum it estimated at more than $170.8  billion. Prosecutors did not say how they arrived at that  figure.

They said the investigation is continuing. No one else has  been charged since Madoff was arrested three months ago.

“The charges reflect an extraordinary array of crimes  committed by Bernard Madoff for over 20 years,” Acting U.S.  Attorney Lev Dassin in Manhattan said. “While the alleged  crimes are not novel, the size and scope of Mr. Madoff’s fraud  are unprecedented.”

Madoff was charged with securities fraud, mail fraud, wire  fraud, three counts of money laundering, making false  statements and perjury among other charges, according to the  court documents.  He faces up to 150 years  imprisonment, according to sentencing guidelines.

There is no plea agreement with Madoff, who remains under  house arrest. He returned to his Manhattan penthouse apartment  after a court hearing where prosecutors announced expanded  charges against him.

When defendants agree to plead guilty, they often reach a  plea bargain, only admitting guilt on some of the charges in  exchange for their cooperation. In this case, however, Madoff is expected to plead guilty  to all 11 counts at his next court appearance tomorrow, his  lawyer said. The government may then ask the judge to jail him  until he is sentenced.

Prosecutors have said Madoff confessed in December to  running a massive Ponzi scheme — a fraud in which early  investors are paid with the money of new clients. The purported swindle operated for decades, offering  amazingly consistent returns of between 10 percent and 12  percent, but collapsed in last year’s market meltdown.

In court papers, prosecutors contended Madoff hired  numerous employees “with little or no prior pertinent training  or experience in the securities industry” to communicate with  his investment clients and “generate false and fraudulent  documents.”

They said Madoff’s investment business had about 4,800  client accounts as of Nov. 30. 2008, and issued statements for  that month reporting that client accounts held a total balance  of about $64.8 billion.

In reality, the company “held only a small fraction” of  that balance for clients.

At the hearing, the gray-haired Madoff rested his  fingertips lightly on the table. His voice was soft but steady  as he uttered his first sentences in court since his Dec. 11  arrest.

He looked straight ahead or straight down as he sat with  his lawyers, and was slightly stooped as he stood to answer the  judge’s questions. He mostly answered “yes” or “no” at the  proceeding, in which the judge asked him about potential  conflicts involving his lawyer.

Madoff told U.S. District Judge Denny Chin that he was  happy with his lawyer, Ira Lee Sorkin. The judge ruled that  there was no reason to bar Sorkin from the case.

Madoff said he had never been under the care of a  psychiatrist, nor had he taken any alcohol or drugs in the last  24 hours.

Sorkin declined later to comment on his client’s mental and  physical health.

Asked by reporters if Madoff will explain his actions,  Sorkin said: “At the appropriate time, he will speak. He will  speak when he is asked questions by the judge.”

Assistant U.S. Attorney Marc Litt, the chief prosecutor in  the case, told the judge that Madoff could face up to 150 years  in prison under federal sentencing guidelines. If Madoff pleads  guilty, as expected, the judge said he would sentence Madoff in  several months.

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