Madoff Sentenced to 150 Years for Ponzi Scheme

Madoff Sentenced to 150 Years for Ponzi Scheme
By JACK HEALY
Copyright by The New York Times
Published: June 29, 2009
http://www.nytimes.com/2009/06/30/business/30madoff.html?_r=1&ref=global-home


A federal judge sentenced Bernard L. Madoff to 150 years in prison on Monday for operating a huge Ponzi scheme that devastated thousands of people, calling his crimes “extraordinarily evil.”

In pronouncing the sentence — the maximum he could have handed down — Judge Denny Chin turned aside Mr. Madoff’s own assertions of remorse and rejected the suggestion from Mr. Madoff’s lawyers that there was a sense of “mob vengeance” surrounding calls for a long prison term.

“Objectively speaking, the fraud here was staggering,” the judge said. “It spanned more than 20 years.”

The sentencing came at the end of a 90-minute hearing in which victims of the $65 billion fraud told a packed courtroom that the judge should show no mercy and Mr. Madoff himself stood up from the defense table to acknowledge the damage he had inflicted and express regret.

“I’m responsible for a great deal of suffering and pain, I understand that,” the 71-year-old financier told the court. “I live in a tormented state now, knowing all of the pain and suffering that I’ve created. I’ve left a legacy of shame, as some of my victims have pointed out, to my family and my grandchildren.”

Addressing his victims seated in the courtroom, he said: “I will turn and face you. I’m sorry. I know that doesn’t help you.”

Prosecutors said Mr. Madoff deserved the maximum sentence — representing a life sentence and more for the disgraced financier — for perpetrating one of the biggest investment frauds in Wall Street history. Mr. Madoff’s own lawyers said he should receive only 12 years.

Mr. Madoff wore a dark suit, white shirt and a tie and sat at a polished wood table, surrounded by his lawyers. Prosecutors sat opposite them, and the viewing gallery was crowded with onlookers.

The hearing opened shortly after 10 a.m. with statements from victims of the Madoff scheme, who stood at a lectern and told wrenching stories of how they had lost everything, and were now working several jobs and living hand-to-mouth.

They fought through tears, connected Mr. Madoff to villains from Dante’s Inferno, spoke of their feelings of betrayal and mistrust, and described how their families had lost money that would have gone to caring for disabled relatives.

“How could someone do this to us?” said Dominic Ambrosino, a retired New York City corrections officer who said he lost his life savings with Mr. Madoff and was the first victim to speak. “We worked honestly and so hard.”

Another victim, Sharon Lissauer, who said she invested all of her savings with Mr. Madoff, told the court: “He should spend his whole life in jail. He’s ruined so many people’s lives. He killed my spirit and shattered my dreams.”

After Mr. Madoff’s victims finished speaking, his lawyer, Ira Lee Sorkin, stood up and said the government’s request for a 150-year sentence bordered on absurd. He called Mr. Madoff a “deeply flawed individual,” but a human being nonetheless.

“Vengeance is not the goal of punishment,” Mr. Sorkin said.

Even with a lesser term, Mr. Sorkin added, Mr. Madoff expects to “live out his years in prison.”

But in meting out the maximum sentence, Judge Chin pointed out that no friends, family or other supporters had submitted any letters on Mr. Madoff’s behalf, attesting to the strength of his character or good deeds he had done.The hearing on Monday marked a climactic moment in the criminal case against Mr. Madoff, whose name has become synonymous with greed and fraud on Wall Street. Dozens of photographers and television camera crews from New York to Britain to China waited outside the federal district courthouse on Pearl Street as reporters, legal teams and Mr. Madoff’s victims filed toward the courtroom.

“We’re hoping for a big sentence only as a deterrent,” Cynthia Friedman, who said she lost her life savings with Mr. Madoff, said outside the courtroom. “He can’t hurt us anymore.”

It was a scene reminiscent of the morning in March when Mr. Madoff walked into the same courthouse with his lawyers and pleaded guilty to a series of counts of fraud, theft and perjury. This time, however, Mr. Madoff was brought to court from his jail cell.

Mr. Madoff’s case was playing out amid a tangle of lawsuits, criminal and civil investigations, and competing claims for restitution prompted by revelations of the outsize fraud at Bernard L. Madoff Investment Securities.

It will be at least another three months before the judge makes a decision on repaying the victims. Prosecutors requested more time to sift through Mr. Madoff’s records to determine how much was lost and how many people are owed.

Mr. Madoff’s accountant, David G. Friehling, was charged with securities fraud in March, and is so far the only other person to face criminal charges connected to the Ponzi scheme. A New York financier whose clients lost $2 billion with Mr. Madoff has been charged with fraud and deception in a civil suit by the New York State attorney general.

The inspector general of the Securities and Exchange Commission is examining how regulators failed for years to catch Mr. Madoff. Investment funds that channeled money to Mr. Madoff have been sued, and two have agreed to return millions they withdrew before Mr. Madoff’s December arrest.

Mr. Madoff will most likely return to his cell at the Metropolitan Correctional Center in Lower Manhattan as federal prison officials determine where he will serve his sentence.

For decades, Mr. Madoff built his reputation — and his client base — on the promise of healthy returns that flowed in as reliably as the tides. Big hedge funds and notables like Elie Wiesel and Sandy Koufax entrusted their money to Mr. Madoff’s investment business, but so did hundreds of retirees and smaller investors.

But the reliable returns and monthly investment statements simply masked a Ponzi scheme that attracted new money to pay existing investors and finance his operating costs.

When the cash ran out, the illusion imploded.

Zachery Kouwe and Diana B. Henriques contributed reporting.