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Accused swindler Bernard Madoff (bottom) enters the Manhattan federal court house in New York on March 12, 2009 - Source: Reuters -
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Bernard Madoff, accused of running the biggest fraud in Wall
Street history, is expected to plead guilty in what is shaping up
to be a courtroom drama featuring denunciations by investors and a
renewed push by prosecutors to jail him immediately.
Victims of Madoff's Ponzi scheme, which drew in as much as $126
billion over two decades before the 2008 market meltdown, have been
invited to speak when the former NASDAQ stock market chairman is
expected to admit to 11 criminal charges.
The gray-haired, 70-year-old Madoff, looking grim in a gray suit,
walked into the Manhattan federal courthouse at 7:19 am EDT (1219
NZ) after being escorted past dozens of photographers and TV crews
in the early morning light.
The plea proceeding was scheduled for 10 am EDT (1500 NZ).
Some TV stations, broadcasting live, followed Madoff's vehicle by
helicopter when it left the luxury apartment building where he has
been under house arrest.
The media frenzy surrounding Madoff has swelled as he became one
of the most vilified people in America, one symbol of the financial
crisis.
Fraud victims lined up to enter the courthouse and the hallways
were filled with scores of people waiting for the much-anticipated
hearing.
"I would gladly trade his having a relatively minor jail sentence
for his turning up where the assets are. I think that's true of a
lot of people," said Jesse Cohen, 50, an unemployed commercial real
estate executive from Summit, New Jersey.
"I hope that he gets the most restrictive, worst environment
possible."
Madoff is accused of running an unprecedented global financial
fraud.
He is charged with securities fraud, investment adviser fraud,
mail fraud, wire fraud, three counts of money laundering, false
statements, perjury, false filings with the US Securities and
Exchange Commission and theft from an employee benefit plan.
His investors included hedge funds, banks, Jewish charities, the
wealthy and small individual investors in North and South America
and Europe.
Presiding Judge Denny Chin, perhaps anticipating drama not seen in
Manhattan federal court since proceedings involving other
well-known corporate defendants such as Martha Stewart, Bernard
Ebbers and Michael Milken, has urged investors to keep their
emotions in check.
"I understand that emotions are high but we have to remember to
conduct ourselves in the manner that is appropriate to a courtroom
proceeding," he said at a hearing on Tuesday.
At that hearing, Madoff's lawyer said his client was expected to
plead guilty to charges filed by US prosecutors, only three months
after his arrest.
The former Wall Street trader and investment adviser is the only
person charged in what was a family run business, but questions
remain about the case, including whether anyone else will face
criminal prosecution.
Madoff did not come to a plea agreement with prosecutors, an
indication that he was unwilling to admit that there was a
conspiracy.
Prosecutors may ask Chin to jail Madoff, revoking $19 million bail
until sentencing in a few months' time.
Sentencing guidelines call for him to go to prison for a maximum of 150 years.
If convicted, he will likely spend the rest of his life in a
low-security prison doing daily chores.
The case against Madoff, which shocked his investors around the
world and sparked a storm of criticism of regulatory authorities
for failing to catch him despite warnings and tips over many years,
began with his arrest on December 11.
Authorities said Madoff confessed to his sons on December 10 that
he had run a giant Ponzi scheme with $97.6 billion in losses and
that he expected to go to jail.
A Ponzi scheme is one in which early investors are paid with
money of new ones.
In court documents on Tuesday, the government gave a new estimate
of the size of the scheme - $126.5billion.
The case is USA v Madoff 09-213 in US District Court for the
Southern District of New York (Manhattan).
