Bernard Madoff, accused of running the biggest fraud in Wall Street history, is expected to plead guilty on Thursday in what is shaping up to be a courtroom drama featuring denunciations by investors and a renewed push by prosecutors to jail him immediately.
Victims of Madoff's Ponzi scheme, which drew in as much as $65 billion over two decades before the 2008 market meltdown, have been invited to speak when the former Nasdaq stock market chairman is expected to admit to 11 criminal charges.
The gray-haired 70-year-old Madoff, looking grim in a gray suit, walked into the Manhattan federal courthouse at 7:19 a.m. EDT after being escorted past dozens of photographers and TV crews in the early morning light. The plea proceeding was scheduled for 10 a.m. EDT.
Some TV stations, broadcasting live, followed Madoff's vehicle by helicopter when it left the luxury apartment building where he has been under house arrest. The media frenzy surrounding Madoff has swelled as he became one of the most vilified people in America, one symbol of the financial crisis.
Fraud victims lined up to enter the courthouse and the hallways were filled with scores of people waiting for the much-anticipated hearing.
I would gladly trade his having a relatively minor jail sentence for his turning up where the assets are. I think that's true of a lot of people, said Jesse Cohen, 50, an unemployed commercial real estate executive from Summit, New Jersey.
I hope that he gets the most restrictive, worst environment possible.
Madoff is accused of running an unprecedented global financial fraud. He is charged with securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the U.S. Securities and Exchange Commission and theft from an employee benefit plan.
His investors included hedge funds, banks, Jewish charities, the wealthy and small individual investors in North and South America and Europe.
Presiding Judge Denny Chin, perhaps anticipating drama not seen in Manhattan federal court since proceedings involving other well-known corporate defendants such as Martha Stewart, Bernard Ebbers and Michael Milken, has urged investors to keep their emotions in check.
I understand that emotions are high but we have to remember to conduct ourselves in the manner that is appropriate to a courtroom proceeding, he said at a hearing on Tuesday.
At that hearing, Madoff's lawyer said his client was expected to plead guilty to charges filed by U.S. prosecutors, only three months after his arrest.
The former Wall Street trader and investment adviser is the only person charged in what was a family run business, but questions remain about the case, including whether anyone else will face criminal prosecution].
Madoff did not come to a plea agreement with prosecutors, an indication that he was unwilling to admit that there was a conspiracy.
Prosecutors may ask Chin to jail Madoff, revoking $10 million bail until sentencing in a few months' time. Sentencing guidelines call for him to go to prison for a maximum of 150 years. If convicted, he will likely spend the rest of his life in a low-security prison doing daily chores.
The case against Madoff, which shocked his investors around the world and sparked a storm of criticism of regulatory authorities for failing to catch him despite warnings and tips over many years, began with his arrest on December 11.
Authorities said Madoff confessed to his sons on December 10 that he had run a giant Ponzi scheme with $50 billion in losses and that he expected to go to jail. A Ponzi scheme is one in which early investors are paid with money of new ones.
In court documents on Tuesday, the government gave a new estimate of the size of the scheme -- $64.8 billion.
The case is USA v Madoff 09-213 in U.S. District Court for the Southern District of New York (Manhattan).
(Editing by Maureen Bavdek)