New York: Admitted thief Bernard Madoff will leave his jail cell and be taken under guard to court on Monday morning to hear his punishment for running Wall Street’s biggest and most brazen investment scheme.
A US judge is expected to sentence Madoff, 71, to an effective life term in prison during an emotional court hearing starting at 10 a.m. EDT (7:30 pm IST) in which some of his defrauded investors will describe the shock of losing their life savings.
The swindler, who pleaded guilty to a slew of crimes in the same Manhattan federal court in March, will “speak to the shame he has felt and to the pain he has caused,” said his lawyer, Ira Lee Sorkin, who has suggested a 12-year prison sentence.
“Given the enormous amount of funds he has stolen and the number of victims, the sentence is going to be very, very high,” said Paul Radvany, a law professor at Fordham University in New York and a former federal prosecutor.
The 100 or so letters sent to the judge from customers and what 10 will say at the hearing could have “a great impact” at the sentencing, Radvany said.
Investigators do not know how much was stolen, according to court papers. About $13 billion has been traced to more than 1,300 customer accounts. The trustee winding down the Madoff firm has so far collected $1.2 billion to return to investors.
Prosecutors also say $170 billion flowed through the principal Madoff account over decades and that weeks before his December arrest, the firm’s statements showed a total of $65 billion.
The hearing will be held in a ceremonial courtroom that accommodates 250 people. Two other rooms in the courthouse in lower Manhattan are being provided for defrauded investors and spectators to watch on closed-circuit TV.
Family will not attend
Madoff’s wife Ruth and other family members are not expected to be there. They have not attended any court appearances since his arrest last December.
Madoff’s brother, Peter, and his sons, Mark and Andrew, held executive positions in the brokerage unit of the firm. Their lawyers say they were not aware of or involved in the crooked asset management side.
The judge has allowed Madoff to wear his own clothes at the hearing, instead of the loose-fitting navy blue shirt and pants issued by the jail where he has been held since 12 March.
Legal observers expect US District Judge Denny Chin to sentence Madoff to one of the stiffest punishments for a white collar criminal.
“Madoff organized and led this fraud,” the prosecutors said in court papers on Friday arguing for a life sentence. “Numerous clerical employees and others assisted.”
Madoff has said all along he did it on his own and has not named accomplices. Only his outside accountant has been charged.
Michael Shapiro, a lawyer at law firm Carter Ledyard and Milburn LLP, said he expected a sentence of 30 years, based on previous sentences for large frauds in the same court.
He cited the case of former WorldCom chief executive Bernard Ebbers, who is serving 25 years for accounting fraud in a low-security prison.
“The individual damage that Madoff caused is probably much greater,” Shapiro said. “Thirty years is effectively a life sentence and also takes into account he didn’t kill anybody.”
Madoff will serve his time in a low or medium security prison depending on the length of his incarceration.
Madoff and his wife have been stripped of all of their luxury homes and possessions, although Ruth Madoff is being allowed to keep $2.5 million in cash, according to an agreement with prosecutors.
Revelations that the US, Securities and Exchange Commission missed several warnings about Madoff’s operation, sparked severe criticism of the markets watchdog and calls for tighter regulation of money managers.
“Madoff deserves a sentence befitting a thief, and murderer,” wrote one investor, Julie Behar to the judge. “Because he has in essence murdered the trust the people placed in their investment advisers and the financial markets.”
The case is USA v Madoff 09-213 in US District Court for the Southern District of New York (Manhattan).