Prosecutors have added charges against Bernard Madoff. The alleged Ponzi schemer will appear in court Thursday.

Prosecutors have added charges against Bernard Madoff. The alleged Ponzi schemer will appear in court Thursday.
Bernard Madoff

If Bernard Madoff pleads guilty, as expected, on Thursday, he could be agreeing to a life sentence in prison. The U.S. attorney in Manhattan on Tuesday filed 11 counts that add up to a possible 150 years incarceration and forfeitures of more than $170 billion. Madoff is 70.

Madoff, a founder of the Nasdaq stock market, was arrested in December and accused of running a $50 billion Ponzi scheme over several decades. The counts against Madoff include charges of investment adviser fraud, mail fraud, wire fraud, money laundering, false statements made to regulators, perjury, filing false documents with the Securities and Exchange Commission and theft from an employee benefit plan. His victims number in the thousands and range from wealthy and not-so-wealthy retirees in New York and Florida to European nobles and a number of prominent Jewish charities.

Since it was first revealed, many questioned how Madoff could have pulled off such a massive fraud without help. In court documents Tuesday prosecutors say he hired "numerous" employees to create the appearance that his investment management firm was legitimate and directed them to communicate with clients and generate false statements and other account documents.

Instead of investing client money as he said he was doing, Madoff used new funds to pay redemption requests. He also took investor money as commissions that he used to support his market-making and broker-dealer businesses.

Between 2002 and 2008, more than $250 million of client money was wire transferred to accounts that supported those businesses, prosecutors say. The funds went from New York to London and then back to New York. Madoff used the transfers to create the illusion he was trading for clients.

Prosecutors also say he wired client money from New York to London that was used to buy and maintain property and personal services for Madoff, his family and unnamed associates.

He is also accused of stealing $10 million of pension fund money sent to his firm, redirecting it for his own use and that of others instead of investing it.

Madoff is expected to appear again in Manhattan federal court on Thursday. He has been out on bail on home arrest in his multimillion-dollar New York penthouse awaiting indictment, though on Tuesday he waived the chance to have a grand jury hear the charges against him.

No plea arrangement has been reached yet and there is no agreement on the sentence Madoff might get, according to a Justice Department letter to Madoff's lawyer, Ira Lee Sorkin.

In a bizarre side show, questions were raised about conflicts for Sorkin, a prominent white collar defense lawyer who has in the past represented individuals who were connected to Madoff and could potentially be called as witnesses in the case. Sorkin's parents also once invested with Madoff. But a judge said Tuesday that Sorkin could continue to represent him.

Prosecutors say Madoff lied to regulators and investors and issued false performance and fund information to keep his scheme going. Either through his own efforts or through intermediaries, Madoff attracted new money into his investment management business by promising steady returns, only the performance was fiction.

After Thursday's hearing, the attention will turn to who else may become a target of prosecutors. His wife, Ruth Madoff, who had been represented by Sorkin, is said to be seeking her own attorney, which lawyers say may indicate she has become a person of interest. She did bookkeeping services for her husband's firm and the two are rarely seen apart in the New York and Palm Beach social circles they inhabited.

Madoff's sons, a niece and brother also worked for the firm on the broker-dealer side. Madoff allegedly confessed the scheme to his sons in December the day before the Federal Bureau of Investigation showed up to arrest him.