Posted by Edmond Geary | Posted in Fraud, Money Laundering, Perjury, Securities Fraud, White collar crime | Posted on 08-07-2011
Bernard Madoff swindled billions of dollars from his investors for years, but once caught, he promptly pled guilty to the criminal complaint filed against him in federal court. He did not plea bargain with the government. He just took his medicine. Well, maybe. That way, just pleading to the Complaint as Madoff did, he did not have to give an interview with the prosecution and answer all those detailed questions about where the money went and to whom.
Madoff admitted his guilt to the 11 counts filed against him, including counts alleging fraud, money laundering, and perjury. Madoff then returned 3 months later, on June 29, 2009, to the courtroom to find out what sentence he would receive. Considerable motions and memoranda were filed in preparation for the sentencing hearing. Madoff’s criminal defense lawyers had asked United States District Judge Denny Chin for a 12-year sentence. The presentence report from the probation department recommended a 50-year sentence, and the United States Attorney asked for a 150-year sentence, the maximum sentence under the advisory guidelines, achievable only by running the maximum sentence for every count consecutive to the other counts.
As the judge pondered an appropriate sentence, a just sentence, he considered what the judge described as the unprecedented scale of Madoff’s crime, its duration over 2 decades, and the thousands of victims it harmed. Originally, it was believed that Madoff had caused losses in the neighborhood of $65 billion, but the court-appointed received after investigation estimated investors’ losses at about $10 billion. The judge reflected also that none of the counts to which Madoff carried a life sentence, but any sentence that totaled over 15 or so years would probably be an effective life sentence in light of Madoff’s age.
Of course, Madoff’s lawyers urged the lower sentence in order to give Madoff some sliver of hope he might get out before he died. They also argued Madoff should be given credit for pleading guilty without bargaining with the government, but, as noted above, Madoff could have had his own selfish motive for taking that path.
Madoff personally addressed the court in his allocution, expressed regret and apologized to the public, the court and the victims of his Ponzi scheme, some of whom were present in person. The judge had already read a number of letters from victims of Madoff’s scheme. He found many had lost their life savings, many had lost their trust in the financial system, faith in humanity, suffered loss of dignity.
The judged was struck by one man who had invested his life savings with Madoff and died 2 weeks later. The man’s widow then met Madoff, who told her not to worry and that her money was safe. Trusting Madoff, the widow then invested her own 401(k) with him. That is the kind of damning story that might have gotten lost in the numbers. But it wasn’t, to Madoff’s detriment. And, midst all the letters written by these victims of Madoff, the judge received not one letter written on behalf of Madoff.
Judge Chin sentenced Madoff to 150 years in prison. He explained that Madoff did not deserve a lower sentence, that the punishment should be in proportion to the blameworthiness, and Madoff’s conduct was “extraordinarily evil.” The judge thought the 150 year was, among other things, symbolic, and that it should be symbolic given the enormity of Madoff’s crimes. The judge also doubted Madoff was genuinely remorseful, although that probably would not have changed the sentence rendered.
Speculation continues about why Madoff did it. He had to know he would get caught. All Ponzi schemers know they will get caught. Was it just for the fun of it? Psychopaths lie, manipulate, and deceive in sometimes similar ways. People always wonder why someone would do something like this, but there is never a good answer.
The federal Bureau of Prisons projects Madoff’s release date for the year 2039, but it is considered academic given Madoff’s age. He is serving his time at the medium security Federal Correctional Facility at Butner, North Carolina. Medium security is not a country club. Meanwhile, Judge Chin was nominated to the U.S. Court of Appeals for the Second Circuit, where he now serves.