Bernie Madoff — ‘In My Own Words’

Mar 12, 2009 2:02pm

ABC’s Stu Schutzman from DC:

"Your Honor, for many years up until my arrest on December 11, 2008, I operated a Ponzi scheme…" Thus began the Bernie Madoff "Allocution" to the court — his admission of guilt, the details of his crimes and his mea culpa. "I am actually grateful for this first opportunity to publicly speak about my crimes, for which I am so deeply sorry and ashamed."

Madoff says he began to lure investors into his scheme during the recession of the early 1990s believing he’d end it quickly. "However," he writes, "this proved difficult and ultimately impossible and as the years went by I realized that my arrest and this day would come." His swindle encompassed thousands of people including his closest friends and family. "I cannot adequately express how sorry I am for what I have done."

Madoff told the court the essence of his scheme was to convince potential clients he had a plan to out perform the stock market, yet protect their money by investing in big, safe well-known companies. He sold them on his so called "split strike conversion strategy" which was a way, he said, to hedge against loses and guarantee profits. It was all a lie. "…I never invested those funds in the securities, as I had promised. Instead those funds were deposited in a bank account at Chase Manhattan Bank." And from that account he paid old clients with fresh funds from new clients–a classic Ponzi scheme. "To conceal my fraud, I misrepresented to clients, employees and others, that I purchased securities for clients in overseas markets." Madoff explained he would wire money from his New York account to accounts overseas to cover his tracks, "to make it appear there were actual securities transactions executed on behalf of my……clients."

Madoff further admitted to the court today that he "knowingly" lied to the government about these transactions in 2006.  "Your honor," he concludes, "I hope I have conveyed with some particularity in my own words, the crimes I committed and the means by which I committed them. Thank you." Thus spoke Bernie Madoff and off to jail he went.

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