Madoff Expected to Plead Guilty Thursday

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Madoff Expected to Plead Guilty Thursday

By DIANA B. HENRIQUES
Published: March 6, 2009
Bernard L. Madoff is expected to plead guilty on Thursday to charges that he operated a worldwide $50 billion Ponzi scheme, according to court documents filed late Friday.


A “plea proceeding” on that date was cited in the filings as part of a proposal by federal prosecutors for allowing Mr. Madoff’s victims to be heard in court.

Under federal law, a criminal’s victims have a right to be informed about, and to attend, any court hearing involving a plea bargain by the defendant. But the courts are allowed to fashion alternative arrangements when the number of victims is so large that individual testimony or attendance would be impractical.

That is certainly the case here, prosecutors asserted in the motion they filed Friday evening. Thousands of Mr. Madoff’s known victims are scattered around the world, and some of his victims have not even been identified yet, they said.

As an alternative, Marc Litt, an assistant United States attorney, proposed that victims be kept informed about pending hearings — including the one on Thursday — through notices posted on the United States attorney’s office Web site. Links to that information would also be provided on a Web site maintained by the court-appointed trustee handling victim claims.

Judge Denny Chin of Federal District Court in Manhattan approved the proposal, specifying that “any potential victim who wishes to be heard” must send an e-mail request to the prosecutor’s office by 10 a.m. Wednesday. “The court will rule on whether, and the manner in which, victims may be heard at the proceeding,” Judge Chin noted in his order.

Requests should be sent by e-mail message to usanys.madoff@usdoj.gov. Information about future hearings will be available at usdoj.gov/usao/nys and at madoff.com.

In some past cases involving large numbers of victims, judges have allowed some to testify in court, while reading letters from others into the record or providing copies to the public.

Speculation that a plea bargain was near intensified Friday morning when Mr. Litt filed notice in federal court in Manhattan that Mr. Madoff had waived his right to a formal grand jury review of the accusations he is facing. That waiver allows prosecutors to proceed against him without an indictment.

They will do that by filing what is called a criminal information, a recital of the specific charges to which Mr. Madoff has agreed to plead guilty. Unlike an indictment, which may list dozens of criminal counts, an information is typically tailored to include only those crimes to which the defendant has agreed to plead guilty.

Numerous former federal prosecutors said that such a waiver almost invariably signals that the defendant is going to plead guilty rather than go to trial.

“The defendant has to agree to the waiver,” said Thomas M. Durkin, a former federal prosecutor and now a partner at Mayer Brown. “If he’s agreed to that, that means he’s agreed to plead guilty — or at least, that’s what happens 99.9 percent of the time.”

The Friday developments bring Mr. Madoff a step closer to his day in court, a journey that began publicly with his arrest on Dec. 11. Criminal charges filed against him at that time and subsequent court filings indicated that he confessed to his crime both to family members and the F.B.I. agent who arrested him at his apartment.

Further, Mr. Madoff agreed last month to a partial settlement of regulatory charges filed against him by the Securities and Exchange Commission. In that settlement, he essentially agreed that he would not contest the accusations the agency made against him — a step that would have greatly complicated any effort by his lawyers to assert his innocence at a trial.

Still pending, however, is a hearing to review potential conflicts of interest by Mr. Madoff’s lead lawyer, Ira Lee Sorkin, whose parents had maintained investments with Mr. Madoff before their death several years ago. That hearing, originally scheduled last Wednesday, was adjourned to Tuesday.

It is doubtful that Judge Chin would allow Mr. Madoff to plead guilty until he waives his right to be represented by a lawyer without these conflicts. However, a ruling on that matter could take place immediately before the judge hears Mr. Madoff’s plea because Mr. Madoff was aware of these potential conflicts when he hired Mr. Sorkin.

The United States Marshals Service is making preparations for the plea hearing, which include setting up additional courtrooms with video monitors to handle the number of victims, reporters and spectators, said Joseph R. Guccione, the United States marshal for the Southern District of New York.

Mr. Sorkin’s co-counsel, Daniel J. Horwitz, said that the notice by prosecutors on Friday morning “speaks for itself.”

“He has waived his right to an indictment and an information will be filed against him,” Mr. Horwitz said.

Yusill Scribner, a spokeswoman for the United States attorney’s office in Manhattan, declined to comment.

If Mr. Madoff does plead guilty on Thursday, it could nevertheless be several months before he is sentenced, several former prosecutors said. The single count of securities fraud that he faces now carries a prison term of up to 20 years.

As the case plays out, the number of claims from Madoff clients has nearly doubled in the last two weeks.

William K. Rashbaum and Zachery Kouwe contributed reporting.

Next Article in Business (4 of 26) »A version of this article appeared in print on March 7, 2009, on page B1 of the New York edition.