Madoff plea may lead to incrimination of others
Madoff plea may lead to incrimination of others
10:57 PM EST, March 7, 2009
Wall Street pariah Bernard Madoff is set to leave his midtown penthouse twice this week, get into a vehicle accompanied by security guards and be driven downtown to federal court.

Madoff, 70, who has been under house arrest since December, should enjoy those chauffeured tours while he can. For Madoff, time as a free man, relatively speaking, is running out.

During the most important of those appearances Thursday, Madoff, suspected of running a $50-billion Ponzi scheme, is expected to plead guilty to securities fraud and related charges. If a change of heart and legal snafus don't derail the plea, it will be a pivotal event closely watched for clues to what happens next. A key question will be whether Madoff's wife, Ruth, or his sons face prosecution.

Some investors are expected to be in court and by law have a right to speak to Judge Denny Chin, who was assigned the case after Madoff said Friday that he was waiving his right to be indicted. Many seem outraged by a plea, fearing prosecutors might give Madoff a break. "He should be given ice in the wintertime and lots of it," said Burt Ross, the former mayor of Fort Lee, N.J., who said he lost $5 million.

Madoff's possible prison term depends on the crimes to which he pleads. A source familiar with the case said Madoff's criminal information will contain charges of securities fraud, mail and wire fraud, and money laundering. Securities fraud alone carries a maximum sentence of 25 years.

A tally of the possible penalties earlier this year showed Madoff faced 30 years to life under sentencing guidelines, so defense attorney Ira Sorkin will have to do some hard bargaining to get that number down if more than securities fraud is involved.

Another important factor is Madoff's family's and business associates' potential exposure. Important clues will be found if Madoff pleads guilty and tells the court other people "known and unknown" were involved, said former federal prosecutor Steven Frankel.

But so far, it is unclear if Madoff faces conspiracy charges. If that's absent from information to be filed this week, it suggests Madoff hasn't given prosecutors enough to go after anyone else.

While Ross can't say if Madoff's family members had anything to do with the scandal, he believes Madoff had help. "I am telling you, he didn't do this alone," Ross said.

FBI documents said Madoff's sons alerted investigators after their father said his investing company was a giant fraud. Also at issue is whether Ruth Madoff should be allowed to keep the $70 million she has claimed through Sorkin is her own money.

"Mrs. Madoff did not earn it, she did not inherit it and there is no deal that should allow her to keep it," Ross said. Sorkin couldn't be reached yesterday.

Federal prosecutors have signaled they intend to go after Madoff's assets, and filings indicate they will challenge Sorkin's claim that Ruth Madoff is entitled to keep her millions, including the Manhattan apartment.

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