Madoff to plead guilty, could face up to 150 years

(Agencies)
Updated: 2009-03-11 09:10

In court documents, prosecutors revealed some details of how the fraud was carried out, saying Madoff hired numerous employees to serve as a "back office" for his investment advisory business.

Former financier Bernard Madoff exits Federal Court in Manhattan, New York on Tuesday, March 10, 2009. [Agencies]

The government said many of the employees hired to perform those functions had little or no prior training or experience in the securities industry.

Prosecutors said Madoff caused those employees to, among other things, "communicate with clients and generate false and fraudulent documents including, but not limited to, monthly client account statements and trade confirmations that purportedly reflected the purchases and sales of securities that Madoff claimed had been conducted on behalf of (his) clients."

Prosecutors say Madoff operated a massive Ponzi scheme in which his clients' funds were misappropriated and converted to the use of Madoff, his business and others.

Chin said he will not sentence Madoff for several months after Thursday's proceedings.

Sorkin complained that federal authorities have not let lawyers for Madoff study the financial records of his company so he can show that some individuals or financial funds actually received more in payouts over the years than they are claiming they lost.

Chin said he understood that Madoff was not agreeing to the extent of the losses.

The revelations about Thursday's plea came at a hearing that was supposed to center on Madoff's agreement to waive any potential conflicts of interest involving Sorkin.

Madoff, speaking softly, acknowledged that Sorkin might be conflicted in his loyalties if his case ever went to trial because Sorkin's family had invested more than US$900,000 with Madoff and because Sorkin once represented two accountants linked to Madoff in a securities action.

Madoff was charged with securities, investment adviser, mail and wire frauds along with money laundering, making false statements, perjury, making a false filing with the Securities and Exchange Commission, theft from an Employee Benefit Plan and two counts of international money laundering.

In its court papers, prosecutors reserved the right to pursue up to US$170 billion in criminal forfeiture. However, the amount bares little relation to how much Madoff is believed to have stolen or lost. Instead, it represents the total amount of money that could be connected to the fraud.

 

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