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NEW YORK: Bernard Madoff, mastermind behind the largest and most sweeping Ponzi scheme ever, on Monday faces the possibility of spending the rest of his natural life in prison. Madoff is scheduled to appear in U.S. District Court in Manhattan before Judge Denny Chin, who could sentence him to as many as 150 years in federal prison.That is the maximum sentence that federal prosecutors requested for Madoff, who confessed on March 12 to running a Ponzi scheme that stole billions of dollars from thousands of victims. Madoff orchestrated the scam by masquerading his investment firm as a legitimate business. But in reality, Bernard L. Madoff Securities, which he founded in 1960, was nothing more than a front for the elaborate scam.In a Ponzi scheme, the scammer uses fresh money from unsuspecting investors to make payments to more mature investors, creating the false appearance of legitimate returns. In Madoff’s case, he sent statements to victims claiming that their investments had grown several times over, but in actuality he had stolen, not invested, their money.Investigators said that Madoff maintained an aura of exclusivity, while his alleged accomplices courted new investors because they needed a constant influx of fresh funds. Investigators believe that Madoff had been running his scam since at least the 1980s until he finally ran out of money in December 2008, when he admitted the fraud to family members.Sentence: 150 years, or 12?Madoff, age 71, pleaded guilty to 11 criminal counts, including fraud, money laundering, perjury, false filing with the Securities and Exchange Commission, and other crimes. Prosecutors with the U.S. Attorney’s office in New York requested the maximum sentence of 150 years, based on the number of victims, the amount of money he stole and the extent of the damage he caused.0:00
/4:18Inside Bernie’s house of cardsMany of his victims were wiped out financially by the scam and they have sent letters to the judge requesting a life sentence.But Madoff’s lawyer Ira Lee Sorkin requested a 12-year sentence. Sorkin explained, in his letter to the judge, that his septuagenarian client isn’t likely to outlive the sentence by more than a year.”Mr. Madoff is currently 71 years old and has an approximate life expectancy of 13 years,” wrote Sorkin. “A prison term of 12 years — just short of an effective life sentence — will sufficiently address the goals of deterrence, protecting the public and promoting respect for the law.”In his letter, Sorkin described Madoff as “non-violent,” noted his “voluntary surrender” to authorities and complained about the “desire for a type of mob vengeance” in the victims’ impact letters.Compensating the victimsThus far, federal investigators have identified 1,341 investors in Madoff’s firm, with losses exceeding 13 billion. They’re still tallying the damage.A group of victims sent the judge a 141-page collection of letters detailing the extent of damage that Madoff had inflicted on them. Many of the victims said they had banked their life savings with Madoff’s firm and they were ruined as a result of his scam. Eleven of the letter-writers requested, and were granted, the right to speak in court on Monday.There are two ways for victims to get compensated, or at least partially compensated, for their losses: through seized assets and through the Securities Investor Protection Corporation, an organization that shields investors in brokerage firms.Madoff’s wife Ruth is still living in their 7 million apartment in Manhattan. But many of their other assets have been seized, including a home in Palm Beach, Fla., an 800,000 yacht named The Bull, and a legitimate investment firm that Madoff kept separate from the scheme. The value of these and other assets will eventually be used to compensate victims, based on how much they invested in Madoff’s firm.Also, SIPC will pay up to 500,000 for any eligible claimant who lost money to Madoff, based on how much they put in. This coverage comes from dues paid by brokerage firms.Some victims are unhappy with this system. Joe Stewart of Las Vegas explained, in a written statement to CNNMoney.com, that as an indirect investor he is not covered by SIPC. Another victim, Dana Foy of Jemez, N.M., complained that SIPC will only compensate him for the 150,000 he invested in the firm, not the 600,000 that the firm told him his investments were worth.”In any other Ponzi scheme, the rule is [that] cash in, minus the cash [that the investor took] out, is going to be the value of your claim,” said SIPC Chief Executive Steve Harbeck to CNNMoney.com.Harbeck said that indirect investors who unknowingly gave their money to Madoff through a separate firm aren’t necessarily barred from compensation, depending on their particular case. “There are very few things in law that are black and white,” he said.Harbeck said that victims have until July 2 to file a claim with U.S. Bankruptcy Court in New York.Madoff’s next homeFor three months since his December arrest, Madoff managed to avoid jail by posting 10 million worth of bail. He spent the time under house arrest, ensconced in his Manhattan apartment.But since his confession in March, he has been incarcerated in the Metropolitan Correctional Center in lower Manhattan, a holding facility for convicts awaiting sentencing. This has given him a taste of life behind bars.Once he is sentenced, he will probably be transferred to a medium-security federal prison, according to prison consultants. Madoff’s status as a non-violent offender should keep him out of maximum-security, consultants said. But they added that the massive scale of his crimes and his hefty sentence would make him ineligible for a low-security prison or a minimum-security prison camp, which inmates usually prefer because of safety, fewer restrictions and better quality of life.In a medium-security prison, he would live in a cell, separated from the outer world by double layers of razor wire fencing with electronic detection systems, according to the Federal Bureau of Prisons. He would have to work a menial job, possibly in a kitchen or laundry room, for 12 to 40 cents an hour.The BOP will have the final say as to where Madoff will serve his sentence. BOP spokeswoman Felicia Ponce said they try to place inmates within 500 miles of their families.Keeping that in mind, Alan Ellis, attorney and author of the “Federal Prison Guidebook,” believes that Madoff will probably get sent to Federal Correctional Institute Otisville or FCI Ray Brook, both in upstate New York, FCI Fairton in New Jersey or FCI McKean in Pennsylvania.Madoff will have to learn how to survive in the medium-security environment, where there are many violent offenders, according to prison consultants.”There will be people who think that Bernie can give them stock tips, but I don’t see anyone being his big pal,” said Larry Levine, founder of Wall Street Prison Consultants who served 10 years for his ties to organized crime. “I believe he’ll be treated like an outcast.”

Source:CNN

NEW YORK: When Ponzi scheme mastermind Bernard Madoff is sentenced on Monday, he’ll be sent to a real prison with real bars and violent offenders, not a “country club” for white collar crooks, consultants say.Madoff, age 71, faces a maximum sentence of 150 years in the federal prison system. This is based on his confession to 11 felony counts for orchestrating the largest Ponzi scheme of all time. For decades, Madoff stole billions of dollars from thousands of victims, while masquerading as a legitimate businessman through his investment firm.The length of Madoff’s maximum sentence, which is based on the sweeping magnitude of his crimes, gives him an incentive to escape and virtually ensures that he’ll be sent to a prison instead of a minimum-security camp, according to prison consultants.”Madoff, he’s not going to a camp, ever,” said Larry Levine, founder of Wall Street Prison Consultants and a former inmate of the federal prison system. “His sentence is too long, so he becomes a flight risk. And then it gets into the severity of his crime. If you have more than 10 years, you can’t get a camp.”No camp for MadoffCamps are generally preferred by convicts, because they’re deemed as safer, with fewer restrictions, consultants said.”Prison camps are open facilities,” said Alan Ellis, an attorney, prison consultant and author of the “Federal Prison Guidebook.” “They are not surrounded by a fence. They generally house first-time offenders, non-violent offenders, people who are not going to be troublemakers.”Larry Levine speaks from first-hand experience. During his 10-year sentence for ties to organized time, he said he served in 11 federal facilities, including high, medium and low security prisons, and minimum-security prison camps.He said his favorite facility was Federal Prison Camp Nellis, on an air force base near Las Vegas. That’s where Martha Stewart’s co-conspirator in insider trading, Peter Bacanovic, served five months. The facility has since closed.Madoff will most likely serve time in a medium-security prison, consultants believe — his non-violent history will keep him out of maximum-security, but his sentence is too long to justify low-security.Madoff’s next homeMadoff’s lawyer, Ira Lee Sorkin, would not comment on whether he’ll request a specific prison for his client. The Federal Bureau of Prisons has the final say in such matters. BOP spokeswoman Felicia Ponce said the bureau tries to place inmates within 500 miles of their families, but she would not comment on where Madoff will be sent.But Alan Ellis believes Madoff will probably land in one of the closest medium-security prisons to his family in Manhattan, where he lived in a 7 million apartment until his March 12 guilty plea. Since then, he has been incarcerated in the Metropolitan Correctional Center in lower Manhattan, a temporary federal facility, prior to his prison transfer.Ellis identified the most likely prisons for Madoff’s term as Federal Correctional Institution Otisville, about 70 miles northwest of New York City, and FCI Fairton in nearby New Jersey. He said that Madoff might also be sent to FCI Ray Brook in upstate New York and FCI McKean in northwestern Pennsylvania. All are medium-security.In a medium-security prison, prisoners are fenced behind a double-layered razor-wire perimeter with electronic detection systems, according to Felicia Ponce of the BOP. Inmates share cells, which are closely monitored after lights-out by patrolling officers, she said. They are subject to cell searches and pat-downs in the near-constant search for weapons and other contraband. They work menial jobs, often in kitchens or laundry rooms, where they are paid 12 to 40 cents an hour.Madoff’s prison survival strategy”You’re going to find a lot of people in medium who have a violent background,” said Ellis, noting that the top concerns of his soon-to-be-incarcerated clients are “fear of prison assault” and “fear of the unknown.”Levine said that Madoff might be targeted by other prisoners as “an economic terrorist” and blamed as a general scapegoat for the financial woes of family members on the outside, even if they had nothing do with his Ponzi scheme.”There will be people who think that Bernie can give them stock tips, but I don’t see anyone being his big pal,” said Levine. ” I believe he’ll be treated like an outcast.”0:00
/4:18Inside Bernie’s house of cardsLevine said that Madoff should always “maintain high visibility” as a security precaution.”Try to stay in an area where there’s a lot of people watching you, where the guards are watching you,” Levine said, when asked what his advice would be for Madoff. “Do not become confrontational with anybody. Respect people; be polite. Don’t borrow anything from anyone. Don’t become beholden to anyone.”If Madoff feels that he’s in danger, then he can report the threat to correctional officers and request protective custody, said Ponce. If that happens, he would be separated from the general inmate population and put into a special housing unit while the prison staff investigated his claims, she said.In this regard, Madoff’s fame — or infamy — might actually help keep him out of danger, the consultants said.”If he gets assaulted while he’s in there, that’s big news, and the BOP hates publicity,” said Levine. “If anything comes down on Madoff, it’s going to come down on the warden.”

NEW YORK: Convicted Ponzi scammer Bernard Madoff will probably spend the rest of his life in jail.On June 29, Judge Denny Chin of the U.S. District Court in New York sentences the 71-year-old. The maximum sentence is 150 years in a federal prison, based on Madoff’s guilty plea to 11 criminal counts, including fraud, money laundering, perjury, false filing with the Securities and Exchange Commission, and other crimes.”[The Ponzi scheme's] effect on society was widespread,” said Ken Rubinstein, asset protection lawyer with the New York firm Rubinstein & Rubinstein. “Its effect on individual victims was economically and psychologically catastrophic. I can’t see how any judge would sentence him for any period that would be less than his remaining lifespan.”0:00
/4:18Inside Bernie’s house of cardsVictims of Madoff’s scheme have appealed to Judge Chin for a sentence that would insure Madoff stands no chance of getting out. Leonard Forrest of Port St. Lucie, Fla., wrote to the judge that Madoff “deserves at best to spend the rest of his life in prison just as we will spend the rest of our lives in financial ruin and emotional and physical devastation.”Given the severity of Madoff’s crimes, legal experts believe his victims will probably get their wish. Thus far, federal investigators have identified 1,341 investors in Madoff’s firm, with losses exceeding 13 billion, and they’re not done tallying up the damage.Generally, pending sentences carry a minimum-to-maximum range. But in Madoff’s case, the list of legal offenses is so severe that there is no mandatory minimum sentence listed in legal documents filed by the Justice Department.In its sentencing guidelines, the D.O.J. explained how Madoff accumulated “offense levels” based on the severity of his crimes, taking into account the number of his victims, the amount of money that was stolen, the extensive and international nature of his crimes, and other factors.”The [prosecutors'] goal here is to make sure that Bernard Madoff never sees the light of day,” said William Sullivan, a former federal prosecutor and a partner at Winston & Strawn in Washington, specializing in white collar crime. “This man will do life in prison.”Through his crimes, Madoff tallied up an “offense level” of 54, far exceeding the requirements for a life sentence.”The life sentence begins at [the offense level of] 43,” said Sullivan. “But Bernie found a way to go literally off the charts.”This doesn’t leave any room to argue for a shorter sentence that could conceivably set him free later in life, Sullivan said.Madoff has been locked up in the Metropolitan Correctional Center in Manhattan since March 12, when he pleaded guilty to masterminding the largest Ponzi scheme of all time. He orchestrated the scheme through his firm, Bernard L. Madoff, which he founded in 1960.A Ponzi scheme uses fresh investments from unsuspecting investors to make payments to more mature investors, to create the false appearance of legitimate returns. In reality, Madoff admitted in court that he did not invest the money and did not buy securities for 13 years. Prosecutors believe that Madoff’s scheme started earlier than that, originating “at least as early as the 1980s,” according to federal documents.On June 17, according to CNN sources, Madoff met for three hours with the top watchdog of the SEC, an agency that has come under intense criticism for not detecting his scheme earlier. This led to some speculation that Madoff was trying to make a deal in exchange for information — perhaps for a shorter sentence.Ira Lee Sorkin, one of the lawyers representing Madoff, declined to comment.But Ken Springer, former special agent of the FBI, certified fraud examiner and president and founder of Corporate Resolutions Inc., an investigations and consultant firm, said that Madoff won’t be able to shorten his sentence, based on the severity of his crime.”I don’t think he’s going to get out of jail,” said Springer. “But is he trying to deflect something from his family? It may be just simply to protect the apartment [owned by his wife Ruth.] But it’s a little late to go to confession.”

Source:CNN