BERNARD Madoff was yesterday sentenced to 150 years in jail for masterminding the largest Ponzi scheme in history, six times longer than the penalties meted out to the CEs of WorldCom and Enron.
Madoff appeared in court before US District Judge Denny Chin for the first time since his March 12 guilty plea for an epic swindle that may have reached 65bn.
“I don’t ask for any forgiveness,” Madoff, 71, told Chin. He said he had deceived his brothers, his two sons and his wife, none of whom was in the court. The courtroom burst into applause as Chin imposed the sentence.
Madoff pleaded guilty to securities fraud, mail fraud, wire fraud, investment adviser fraud, three counts of money laundering, false statements, perjury, false filings with the Securities Exchange Commission and theft from an employee benefit plan.
Madoff was led into the 11th floor courtroom in Manhattan Federal Court wearing a suit and flanked by federal marshals.
Seated beside defence attorney Ira Sorkin, Madoff sat silently as nine former investors assailed him for a fraud that cost many their life savings.
Madoff had shown “no remorse”, said victim Carla Hirschhorn of New Jersey at the hearing.
She told Chin her life was a “living hell”, her mother was dependent on social security and her daughter had two jobs to pay her tuition. “Don’t fail us,” she told the judge.
Sharon Lissauer, a model who lives in Manhattan, said the money manager “shattered my dreams” and lost her mother’s inheritance.
Miriam Siegman of Connecticut told Chin that Madoff “discarded me like road kill” and that she now relied on food stamps, collecting recyclable bottles and digging through dumps.
Madoff apologised to his victims in a statement to the court, saying he “left a legacy of shame” and that he lived “in a tormented state now”. He could not admit his error in judgment, he said, and had thought he could “work his way out” of the fraud.
Hundreds of onlookers and dozens of television cameras were outside the lower Manhattan courthouse where Madoff was sentenced.
Sorkin told the court after the victims spoke that his client was a “deeply flawed human being”.
Sorkin challenged the government’s claim that his client’s fraud had led to 13,3bn in losses. He said the amount should be offset by 1,3bn held by the trustee for Bernard L Madoff Investment Securities; by 1,3bn already recovered by the trustee; and by letters sent by trustee Irving Picard, seeking to “claw back” 735m from Madoff investors.
Sorkin also cited the 10bn demanded in various other claw-back lawsuits as an offset, in a letter filed with the court yesterday.
“Thus, if the trustee is successful in his lawsuits, losses will be substantially reduced,” Sorkin wrote.
“The media hysteria that the Ponzi scheme was about 65bn and that Mr Madoff lined his pockets with billions is simply not correct.”
Chin said no other fraud case was comparable to Madoff’s. No letters had been submitted to vouch for Madoff’s character, Chin said, and the “symbolism” of the 150-year sentence was “important”.
Picard, tasked with unwinding Madoff’s firm, said in another letter filed with the court yesterday that the former money manager had not provided “any meaningful co-operation” since his arrest.
David Sheehan, a lawyer for trustee Picard, disputed a claim by Madoff’s attorney that his client had co-operated.
Madoff’s sentencing caps the downfall of an acclaimed investment adviser who told the world his fortune came through an eponymous firm that specialised in making markets, trading securities and advising wealthy clients.
Over three decades, he built a reputation as a brilliant stock picker who delivered steady returns through both bull and bear markets. He attracted an international client roster that included celebrities like filmmaker Steven Spielberg, fund managers such as J Ezra Merkin, charities, universities, friends and even European royalty.
His facade shattered on December 11 as Madoff confessed to authorities that his firm, Bernard L Madoff Investment Securities, was “one big lie”. Under immense pressure from a rush of investor redemptions, he admitted he used money from new investors to pay old ones. Regulators later said his investment advisory business had not made a trade in at least 13 years.
Some of his thousands of investors lost their life savings. Thierry Magon de La Villehuchet, CEO of Access International Advisors, which managed 3bn, was driven to suicide because of his firm’s Madoff-related losses, his brother, Bertrand Magon de la Villehuchet, said in January.
Madoff received the maximum sentence on the 11 fraud charges to which he pleaded guilty. Before his sentencing, he consulted Herbert Hoelter of the National Centre on Institutions and Alternatives, a prisoner advocacy group, according to court records.
The US Bureau of Prisons will now decide where Madoff will serve his term. Bloomberg