NEW YORK, (Reuters) – Bernard Madoff pleaded guilty yesterday to orchestrating the biggest investment fraud in Wall Street history and was jailed to await a sentence that could keep him in prison for the rest of his life.
As some of his victims looked on in the courtroom, the former Nasdaq stock market chairman calmly described for 10 minutes a long-running, worldwide Ponzi scheme that he knew was criminal from the start but thought would end quickly.
“I am painfully aware that I have deeply hurt many, many people,” including family, friends and associates, the grim-faced Madoff, 70, said before U.S. Judge Denny Chin in Manhattan federal court. It was the first time he had spoken publicly of his crime.
“When I began my Ponzi scheme I believed it would end shortly and I would be able to extricate myself and my clients from the scheme,” said Madoff, who wore a gray suit but none of the rings that were a signature of his style.
Madoff, who read from a prepared statement, did not mention the size of the scheme, but prosecutors have said it amounted to as much as $65 billion over 20 years and involved more than 4,800 client accounts.
Madoff said that shutting down the scheme, in which early investors were paid with money from new ones, proved impossible. “As the years went by, I realized that my arrest and this day would inevitably come,” he said.
Madoff has become one of the most vilified men in America, a symbol of the unraveling of Wall Street that has laid bare other multimillion dollar frauds. Some onlookers cheered as he was led out of the courtroom in handcuffs.
Dozens of investors caught in Madoff’s web huddled outside the courthouse, commiserating, crying and passing judgment on the disgraced financier.
“It’s a Pyrrhic, bittersweet victory,” said Miriam Siegman, 65, of New York City. A retired consultant, she said she had lost her life savings to Madoff’s fraudulent investments and now receives food stamps.
“I have no one to help me. That he’s in jail doesn’t change that,” she said. “I still have the rest of my life to live, or try to live, in incredible stress and in total poverty. He took everything.”
Two suicides have been associated with the collapse of Madoff’s scheme.
The swindle has cast a harsh light on securities regulators for failing to uncover the scam, even after a whistleblower brought it to the attention of the U.S. Securities and Exchange Commission in May 1999.
The case has intensified demands for greater regulation of the financial industry.
Madoff’s investors included hedge funds, banks, Jewish charities, the wealthy, and small individual investors in North and South America and Europe.