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Last updated: June 29, 2009 7:18 pm
Cheers erupted in the Manhattan federal courthouse on Monday as Bernard Madoff was sentenced to 150 years in prison, the maximum possible under law, for running a $65bn Ponzi scheme that has devastated thousands of investors around the world.
The sentence came after an emotional hearing in which Mr Madoff, 71, conceded he could offer no excuses for decades-long fraud that may be the biggest in history.
“I leave a legacy of shame, as many of my victims have pointed out, for my children and grandchildren. That is something I will have to live with the rest of my life,” Mr Madoff said before the sentence was handed down. The former Nasdaq chairman also turned briefly to the victims in the courtroom, saying: “I’m sorry, I know that doesn’t help you.”
But his victims were not appeased. Nine of them testified at the hearing. Several had to pause as they were overcome with emotion, while others sat in the benches behind them, weeping.
“Underneath that facade, there truly is a beast. He has fed upon us,” said Sheryl Weinstein, the former finance chief of Hadassah, a Jewish women’s organisation.
Michael Schwartz, who lost a family trust fund and is supporting a disabled brother told the judge: “I only hope that his jail sentence is long enough so that his prison becomes a coffin.”
Mr Madoff’s attorney Ira Sorkin had asked for a 12 year sentence and the probation service had recommended 50 years. But Judge Denny Chin opted for the statutory maximum for the 11 charges to which Mr Madoff pleaded guilty.
Noting that he had not received a single letter in support of Mr Madoff, Judge Chin said: “Mr Madoff’s crimes were extraordinarily evil ... Not merely a bloodless financial crime ... [but] one that takes a staggering human toll.”
The White House said Judge Chin had sent a “loud and clear” signal to investors who handle other people’s money.
Mr Madoff’s family did not attend the hearing, but afterwards his wife Ruth broke her silence, releasing a statement saying she felt “embarrassed and ashamed” and “betrayed and confused” by the revelation of her husband’s crimes.
“Nothing I can say seems sufficient regarding the daily suffering that all those innocent people are enduring because of my husband. But if it matters to them at all, please know that not a day goes by when I don’t ache over the stories that I have heard and read,” she wrote.
While this case is unusual because of Mr Madoff’s age, a sentence of that length would ordinarily lead to Mr Madoff being sent to a maximum security prison.
In recent years, judges have handed down increasingly harsh sentences to high-profile white collar criminals. Bernie Ebbers, former chief executive of WorldCom, was given a 25-year term and Jeffrey Skilling, former head of Enron, more than 24 years, although that sentence was overturned on appeal.
There are still many unanswered questions about Mr Madoff’s decades-long scheme and what happened to the money. Mr Madoff has always insisted he committed the crime alone, but many believe he had accomplices.
David Friehling, Mr Madoff’s long-time accountant, has been charged with falsely certifying that he audited Mr Madoff’s firm and with enabling the investment fraud.
Mr Friehling, who has denied wrongdoing, is scheduled to appear in court next month. No one else has been criminally charged in the case.
The US Securities and Exchange Commission and the trustee leading the effort to recover money for victims have begun filing civil lawsuits, seeking to force some of Mr Madoff’s early backers to return some of the withdrawals they received from him. They have denied wrongdoing.
“What happens after the sentencing will be crucial,’’ said Dan Nardello, former federal prosecutor and chief executive of investigative firm Nardello & Co. ‘’The investigation is clearly not over. Although Madoff confessed and pleaded guilty, there is still much to learn. The government will continue to pursue other responsible individuals and assets belonging to the victims. $65bn ... does not just disappear.’’
Mr Madoff’s investors had $65bn on paper, most of it in fictitious profits, when federal authorities arrested him on December 11. The trustee has so far identified more than 1,341 account holders with collective real losses of about $13bn.
Mr Madoff and his wife have been stripped of most of their assets, including their homes and boats, according to court documents filed last week. Mrs Madoff, who has not been accused of any wrongdoing, will be allowed to keep $2.5m in cash, according to an agreement with prosecutors.
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