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Madoff brother pleads guilty, accepts 10-year term
NEW YORK: Peter Madoff, brother of shamed US financier Bernard Madoff, pleaded guilty on Friday to helping cook the books of the world’s biggest ever Ponzi scheme and accepted a 10-year prison term.
“I apologise to the people I hurt and to my family,” Madoff, 66, told a packed Manhattan courtroom after confessing to tax fraud and falsifying documents on behalf of his brother, who is already behind bars.
Madoff, wearing a dark gray suit and glasses as he sat between his lawyers, pleaded guilty to two counts of conspiracy to commit securities fraud and falsifying investment records.
“Peter Madoff enabled the largest fraud in human history. He will now be jailed well into old age, and he will forfeit virtually every penny he has,” said prosecutor Preet Bharara.
Madoff, who was arrested earlier at his lawyer’s Manhattan office, spoke clearly during his statement, but broke down when he apologized toward the end and said he was initially shocked and horrified by his brother’s fraud.
“Until December 2008 I never suspected that my brother stole from anyone. I was in shock and devastated,” he said. “I lost my reputation. My family was torn apart because of my brother.” Madoff said he was taking Xanax and consulting doctors because of stress tied to the collapse of his brother’s huge fraud, though judge Laura Taylor Swain considered him “fully competent to plead guilty.” He described in detail operations to evade taxes and falsify documents and records, saying: “I accept my responsibility for what I have done. I know my conduct was wrong.” Madoff’s bail was set at US$5 million in securities and US$1 million in cash.
Restrictions were placed on his travel and he was required to surrender his passport. A formal sentencing hearing was set for October 4.
“Peter Madoff played an essential enabling role in the largest investment fraud in US history. He made a pretense of compliance; he was really about complicity,” said a statement from FBI Assistant Director Janice Fedarcyk.
Prosecutors say he has agreed to forfeit US$143.1 billion, a nominal sum representing the fraud that means all his assets will be seized.
“The Madoff investment empire, built on a foundation of deceit, was a house of cards that grew to skyscraper proportions,” said Fedarcyk.
“As Peter Madoff has admitted today, he was one of the chief architects.
For decades, he certified that periodic reviews established the firm’s compliance with internal and regulatory rules.
“In fact, Peter Madoff conducted no reviews. He certified that his examination of the firm’s trading process established its integrity. He did not — indeed, could not — conduct any such examination: Despite the facade, the investment advisory business did not actually trade any stocks.” Peter Madoff may have been sentenced, but the hunt for collaborators in Bernard Madoff’s schemes is far from over.
“We are not yet finished calling to account everyone responsible for the epic fraud of Bernard Madoff and the epic pain of his many victims,” said prosecutor Bharara.
Bernard Madoff, a charismatic mogul and once chairman of the Nasdaq stock exchange, is serving a 150-year sentence at a North Carolina jail where he earns US$170 a month for prison work.
He took in some US$65 billion from thousands of clients over decades, building a reputation as a shrewd investment manager by paying out fake
“profits” to some investors by plundering the new cash from others.
Madoff counted charities, major banks, Hollywood moguls and savvy financial players among those who invested in his massive Ponzi investment scheme.
But his pyramid fraud collapsed in 2008, wiping out numerous family fortunes. He was arrested in December that year, and pleaded guilty in 2009. -- AFP