Bernard Madoff, the most reviled emblem of business corruption to emerge from the nation's latest gilded age, likely will die behind bars after being sentenced Monday to 150 years in prison for what a federal judge called an "extraordinarily evil," multibillion-dollar scam that victimized charities, celebrities, pension funds and average investors worldwide.
But the departure from the public stage of Madoff — who for the first time Monday declared he was sorry and faced his victims in an emotionally wrenching courtroom session — opens a new chapter in his case. It is likely to focus on an investigation of suspected accomplices, a continued hunt for whatever remains of the stolen billions, and intensifying demands by Madoff's victims for reimbursement and improvements to government's oversight of investment companies.
In imposing a sentence usually given only to the most violent criminals, U.S. District Court Judge Denny Chin implicitly discredited the 71-year-old disgraced financier's claim of remorse. And Chin explicitly rejected defense attorney Ira Lee Sorkin's claim that a maximum sentence would unfairly bow to "mob vengeance" demands by the thousands of victims in one of the largest and longest-running financial crimes in history.
Chin said he relied on three factors in setting the sentence: retribution for the unprecedented size of the $13 billion-plus scam, the need to deter any future similar wrongdoers and the scam's impact on its victims.
"The message must be sent that Mr. Madoff's crimes were extraordinarily evil and that this kind of irresponsible manipulation of the system is not merely a bloodless financial crime that takes place just on paper, but that it is ... one that takes a staggering human toll," said Chin, who added that Madoff had not been fully cooperative with authorities.
The punishment far exceeded the prison terms given to other noted white-collar criminals whose convictions involved smaller securities frauds. Former WorldCom CEO Bernard Ebbers was sentenced to 25 years. Former Enron chief executive Jeffrey Skilling received a 24-year prison term.
Madoff, dressed in a gray suit the judge allowed him to wear instead of a prison uniform, stood silently and showed no emotion as Chin announced the sentence.
Applause and cheers
The estimated 60 scam victims in the lower Manhattan federal courtroom applauded and sent up a muted cheer at hearing Madoff's punishment.
"I thought the judge was brilliant. He just hit it out of the ballpark," said Burt Ross, a former Fort Lee, N.J., mayor who was one of nine victims who addressed the court and called for the maximum penalty.
A jubilant Michael DeVita, a Madoff investor from Chalfont, Pa., flashed a V-for-victory sign as he left the courthouse. "One hundred and fifty years made me feel really good that for the first time, the government came down on our side and did the right thing," he said.
Like the judge and federal prosecutors, DeVita and other victims rejected the courtroom pronouncements of Madoff, who turned toward his victims and said, "I am sorry. I know that doesn't help you." Several victims noted afterward that Madoff pointedly tried to absolve his wife, Ruth, his brother Peter and sons Andrew and Mark from any involvement in the scam.
In her first public comment on the case, Ruth Madoff issued a statement saying she felt "embarrassed and ashamed" by the scam. "Nothing I can say seems sufficient regarding the daily suffering that all those innocent people are enduring because of my husband," she added.
The nine victims who addressed the court during the roughly 90-minute sentencing hearing told of retirement dreams decimated, college plans denied, incapacitated clients pushed out of assisted-living facilities and nursing homes and a range of other personal calamities.
The group gave public voice on behalf of scam victims who included Nobel Peace Prize winner Elie Wiesel, retired baseball great Sandy Koufax, Hollywood star John Malkovich and hundreds of other investors.
"Bernard Madoff should no longer be allowed back in society," said Michael Schwartz, of Plainsboro, N.J., whose family has struggled to care for his mentally disabled brother after being victimized by the scam. "I can only hope that his sentence is long enough that his prison cell becomes his coffin."
Madoff was expected to be returned temporarily to the Metropolitan Correctional Center, where he has been jailed since his March 12 guilty plea to securities fraud, perjury, money laundering and eight other charges.
The U.S. Bureau of Prisons is likely to decide within weeks where he will serve his term. Chin said he would recommend that Madoff be sent to a facility in the Northeastern states, but he stressed that the final decision lies with federal prison officials.
The sentencing marked the close of a major chapter in the investigation of a scam in which Madoff used money from newer investors to pay earlier ones — the operational hallmark of a Ponzi scheme.
The scheme collapsed in December as the worst recession in generations prompted Madoff's investors to seek billions of dollars in redemptions.
Many had eagerly vied to put their money in what was widely though quietly touted as an exclusive investment opportunity that had reported uncannily positive gains over the last two decades. But instead of the promised investments in stocks, options and securities, Madoff confessed he had put the money into a Chase Manhattan Bank account he used to pay clients' periodic withdrawals.
Investigators also have alleged that Madoff used investors' millions to fund a lavish lifestyle that included multimillion-dollar homes on Manhattan's Upper East Side and in Palm Beach, Fla.; Montauk, N.Y.; and France, along with yachts, jewelry, loans and payments to his sons and other relatives, and other luxuries.
Chin on Friday directed those assets and others surrendered in a preliminary forfeiture order totaling more than $170 billion.That figure represents the amount prosecutors estimate flowed through Madoff's business.
The forfeiture left Ruth Madoff, who dropped earlier claims that some assets were her property and unconnected to the scam, with an estimated $2.5 million. But even that remains subject to legal claims, Chin ruled.
Now, investigators are expected to focus on whether any of Madoff's relatives, former employees or others played a direct role in the scheme.
Although all have denied having any prior knowledge of the crimes, former federal prosecutor Robert Mintz said investigators will look at the Madoff family as part of an effort "to make sure any co-conspirators are brought to justice."
Apart from Madoff himself, prosecutors have charged his business accountant, David Friehling, with fraud for allegedly failing to conduct meaningful audits that could have uncovered the Ponzi scheme.
Separately, federal court-appointed trustee Irving Picard has sued several so-called feeder funds that channeled investors' money to Madoff.
His allegations that they should have known Madoff's operation was a scam have sparked speculation that federal prosecutors may seek comparable criminal charges.
A worldwide hunt for assets
Picard also leads a worldwide hunt aimed at recovering Madoff's assets and using them to help repay burned investors. He has recovered slightly more than $1 billion so far.
Madoff investors must apply by Wednesday for compensation under the Securities Investor Protection Act, a federal insurance program for clients of bankrupt investment firms.
Another unknown is the outcome of a federal inspector general's investigation of the Securities and Exchange Commission's handling of Madoff, once a respected Nasdaq board chairman. The probe focuses on the agency's failure to detect and halt Madoff's fraud.
Harry Markopolos, a financial fraud investigator, told Congress this year that the SEC took no action despite his repeated claims dating to 2000 that Madoff was operating the largest Ponzi scheme in history.
Also to be decided are victims' legal allegations that Picard and the Securities Investor Protection Corp. (SIPC) are improperly basing reimbursement payments on the amounts former Madoff clients invested, not the higher, interest-boosted amounts listed in the financier's business records. SIPC Chairman Stephen Harbeck called the formula legal and proper Monday.
"Closure will only come when I sign my check from SIPC," said Ronnie Sue Ambrosino, a former Madoff client who now runs a support group for fellow victims.
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