Madoff to Face New Charges, May Be Nearing Plea Deal
Madoff to Face New Charges, May Be Nearing Plea Deal
By David Glovin
March 6 (Bloomberg) -- Bernard Madoff, the alleged mastermind of a $50 billion Ponzi scheme, may be nearing a guilty plea after federal prosecutors filed a notice that they intend to bring new criminal charges against the New York money manager.
Assistant U.S. Attorney Marc Litt today filed a one-page document in Manhattan federal court indicating the government will file an “information,” or charging document, after Madoff agrees to waive a grand jury indictment. Defendants who agree to plead guilty to an information often first waive indictment.
“Madoff is about to enter his guilty plea,” Jacob Frenkel, a former Securities and Exchange Commission attorney, said in an interview. “A criminal information is a consented- to criminal charge used to enter a guilty plea.”
The case has been assigned to U.S. District Judge Denny Chin in New York, according to court papers.
“He intends to waive” an indictment, Madoff lawyer Dan Horwitz said in an interview today. No waiver or criminal information has been filed in court, Horwitz said, declining to comment on whether Madoff plans to enter a guilty plea.
Madoff is scheduled to appear in court on March 10 for the judge to explore whether there is a conflict of interest involving another of his lawyers, a clerk for Chin said. Madoff will next appear in court on March 12 to be arraigned on the new charges, the clerk said.
Madoff lawyer Ira Sorkin’s now-deceased father had an account with Madoff, and in 1992 Sorkin represented a Florida investment firm, Avellino & Bienes, that invested with Madoff. That issue will be the subject of the March 10 hearing.
Ponzi Scheme
Today’s court filing doesn’t indicate that Madoff, who was arrested in December for defrauding investors of billions of dollars, has yet waived an indictment. Nor does it say when prosecutors will file an information.
Madoff, 70, was arrested on Dec. 11 and charged with one count of securities fraud for running a massive Ponzi scheme that paid off old investors with money from new investors. He allegedly told investigators that his investors lost $50 billion. Madoff hasn’t formally responded to the charge.
Under the one existing charge, Madoff faces as much as 20 years in prison. He may face life imprisonment if additional charges are filed.
Madoff has been confined to his multimillion dollar apartment on Manhattan’s Upper East Side. He is free on $10 million bail, which prosecutors agreed to after his arrest. They later asked a judge to jail him. It’s likely they will again ask the judge to lock Madoff up if he pleads guilty, Frenkel said.
Plea Hearing
At a guilty plea, Madoff will have to explain how he broke the law, and Chin has authority to pose additional questions. Frenkel said it’s unlikely that the judge will question Madoff about possible accomplices “because it could affect whatever work the government is doing.”
Frenkel said Madoff appears to be aiding the government in its investigation.
“There is no question that he’s been cooperating because of both the plea to the information and because his lawyer has said as much,” Frenkel said, referring to prior comments by Sorkin that Madoff is talking to prosecutors.
Earlier this week, a judge said in court papers in a related civil suit against Madoff that his lawyers claim that Madoff’s wife, Ruth, is the sole owner of the couple’s Manhattan apartment, $45 million in bonds and $17 million in cash. These assets are “unrelated” to Bernard Madoff’s fraud scheme, the lawyer said, according to the judge.
The criminal case is U.S. v. Madoff, 08-mag-2735, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporters on this story: David Glovin in New York federal court at dglovin@bloomberg.net;
Last Updated: March 6, 2009 13:04 EST
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