March 6, 2009— -- In the government's clearest statement yet that a deal in the criminal case of Bernard Madoff is close to being made, a victims' rights motion was filed Friday evening by the U.S. attorney in the case that indicates Madoff will appear next Thursday in a plea proceeding.
U.S. District Court Judge Denny Chin signed an order granting a request that the thousands of victims of the alleged Ponzi scheme will receive online notification of the court proceedings. They will have to periodically check a special web site set up for the criminal case proceedings.
Any victim who wishes to be heard in Thursday's proceeding will need to notify the government by Wednesday March 11th at 10:00 a.m. The internet address for victims to contact is: firstname.lastname@example.org.
The prosecution sought the court's permission to notify the victims this way because of the thousands of alleged victims already identified and the prospect of there being thousands more still unidentified.
Under federal law, crime victims' rights include timely notification of court proceedings.
It was reveleaed Friday that federal prosecutors have apparently reached a plea deal with the accused con man, in which he will admit to his role in the biggest financial crime in American history.
The deal does not specify how much time Madoff would spend in prison, nor does it exclude the prosecution of Madoff's family or former associates, lawyers familiar with case said.
One former federal prosecutor says he doubts the deal will go easy on Madoff and that the disgraced financier will be spending a long time behind bars.
"I doubt very seriously whether there would be any concession by the government as to jail time or diminished jail time for Mr. Madoff," said Sean O'Shea. "Given the sentencing guidelines in a fraud of this type, I think you're looking at a man who is 70 years old, I think you're looking at the rest of his natural life."
Madoff says he acted alone and that once he confessed to his sons, they turned him in to the FBI. Investigators in the case believe Madoff set up the sequence of the events to give his sons deniability.
Prosecutors could use the charges in the information to again challenge the terms of Madoff's bail, which currently allows him to be under house arrest in his $7 million luxury penthouse on Manhattan's Upper East Side. Madoff wears an electronic ankle bracelet and his wife pays for a team of private security guards
In a filing in federal court Friday, prosecutors said once Madoff waives the right to a grand jury indictment, a legal formality, the government would file an "information" against him. An information is a formal document containing the allegations and criminal charges filed against the defendant.
Madoff's lawyer, Dan Horwitz, told ABCNews.com he has not yet received the waiver for his client to sign.
"The significance of this is that the case will proceed without a grand jury hearing the evidence," said Horwitz.
Horwitz said he could not comment on any deal with prosecutors. "By filing an information, it doesn't always mean someone pleads guilty to it," said Horwitz.
If Madoff signs the waiver, he would likely be arraigned on the charges contained in the information early next week, lawyers in the case said.
Former prosecutors say this is a signal that a deal has been reached in the highly complex scam that robbed thousands of people of billions of dollars.
Madoff Victims are Angry
Madoff's investors are not happy to hear the he may cut a deal.
92-year old Zsa Zsa Gabor is one of them. Her husband Prince Frederick Von Anhalt said the couple lost their $10 million life savings to Madoff.
"It's not enough" for Madoff to just plead guilty and go to jail, Von Anhalt told ABC News. "That's what he wants, he wants to go to jail, his life is over. He wants to protect his family, his wife, his children."
Von Anhalt also wants to see Madoff's wife, Ruth, and his sons arrested and put in jail. "What nerve she has, to say that she wants to keep all that money. That's our money! Screw her!"
There could be a little good news next week for some of the victims who lost money with Madoff. Ten investors will receive the first of the $500,000 payments from the Securities Investor Protection Corporation, which protects investors in the event of a brokerage firm failure.
"These were the first ten people who submitted what I would call easy claims, in other words, these are people who deposited money into the Madoff scam but never withdrew anything," said Stephen Harbeck, President of SIPC.
Over 2,350 claims from angry investors have been filed and that number could soon double. So far the claims add up to around $1 billion. The deadline to submit a claim is July 2, 2009.
Avni Patel contributed to this report.Click Here for the Investigative Homepage.