Madoff ordered to jail after pleading guilty to 11 felony charges

NEW YORK -- Saying he was "deeply sorry," Bernard Madoff pleaded guilty Thursday in federal court to operating a massive Ponzi scheme, then was handcuffed and whisked away to jail as some of his angry victims applauded.

U.S. District Court Judge Denny Chin rejected defense arguments to allow Madoff to remain under house arrest on $10 million bail, saying that the 70-year-old disgraced financier's age and wealth gave him the incentive and means to flee the maximum 150-year prison sentence he now faces.

Chin set sentencing for June 16. Besides prison, Madoff faces billions of dollars in restitution, fines and forfeitures.

Ira Lee Sorkin, Madoff's lead defense lawyer, said he would immediately appeal the remand order.

Dressed in a gray suit and lighter gray tie, Madoff stood and firmly repeated "guilty" 11 times as Chin ran through each count of securities fraud, mail fraud, wire fraud, perjury and other charges against him.

The plea came after Madoff, whose arrest on Dec. 11 set off a wave of financial pain and even ruin for charities, celebrities, hedge funds, trusts and ordinary investors, spoke out about his criminal scam in detail for the first time.

"I am actually grateful for this first opportunity to publicly speak about my crimes, for which I am so deeply sorry and ashamed," he said inside the packed 24th-floor federal courthouse in lower Manhattan.

Speaking quietly yet firmly, Madoff told the hushed courtroom he initially believed he would be able to end the scam quickly, but "this proved difficult and ultimately impossible."

"As the years went by, I realized my arrest and this day would inevitably come," said Madoff. "I am painfully aware that I have deeply hurt many, many people, including the members of my family, my closest friends, business associates and the thousands of clients who gave me their money."

"I cannot adequately express how sorry I am for what I have done," he added.

Although prosecutors charge that the scam began at least as far back as the 1980s, Madoff in court pegged its origin to the early 1990s.

Instead of investing clients' funds in securities as he promised, Madoff said he put the money into a Chase Manhattan Bank account. He said he also used that account to repay individuals, charitable organizations, pension funds, trusts and hedge funds as they periodically requested withdrawals.

Madoff insisted his two other Manhattan-based firms — one for proprietary trading and one for matching stock buyers and sellers — were not connected to the fraud and were "legitimate and profitable."

At the conclusion of Madoff's allocution, an in-your-own-words recitation of the crimes, Chin accepted his guilty plea and asked whether any of the approximately 25 victims in the courtroom wanted to object.

Ronnie Sue Ambrosino, who with her husband, Dominic, lost $1.6 million in life savings to Madoff, said Chin should not accept the plea at this time.

"You have the opportunity today to find out where the money is, and who else is involved in this crime," said Ambrosino.

Maureen Ebel also urged Chin to reject the plea, arguing, "If we go to trial, we will show our people and the world ... that we hold all people accountable."

"If we go to trial we have more of a chance to comprehend the global scope of this horrible crime," added Ebel.

Madoff did not turn look at either woman as they stood at the courtroom podium and spoke.

Nor did he turn when George Nierenberg, the only other victimized investor who addressed the court, glared in Madoff's direction and said, "I don't know if you had a chance to turn around and look at the victims."

Addressing the victims' objections, Assistant U.S. Attorney Marc Litt said federal investigators are continuing an intensive effort to find Madoff's assets to repay investors and bring potential charges against "anyone else involved in this crime."

After accepting the plea, Chin heard arguments from Sorkin, who asked the judge to continue Madoff's $10 million bail and allow the disgraced money manager to remain under house arrest until sentencing.

Sorkin said Madoff "didn't run, he didn't attempt to flee," at any time since confessing his crimes to his sons on Dec. 10 and making a separate confession to arresting FBI agents the following day.

Several victims erupted in derisive laughter, drawing a warning from Chin, when Sorkin said Madoff's wife, Ruth, had used "her own assets" to hire a 24-hour security detail, ensuring that Madoff didn't leave the $7 million Manhattan apartment where he's been under house arrest since late December.

Any risk of flight "is virtually nil," said Sorkin, noting that all of Madoff's assets have been frozen.

Litt moved to object but Chin waved him off, saying, "I don't need to hear from the government. It is my intention to remand Mr. Madoff."

At that, the victims joined in light applause.

Immediately afterward, Chin set Madoff's sentencing date, authorities moved in, cuffed Madoff's hands behind his back, and led him away.

"I'm happy he's in jail," a smiling Ambrosino afterward. "It's a first step."

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