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.
This is not going to be a quiet, sober, dignified group, said John Coffee, professor at Columbia Law School in New York. I think this is going to be a bloodthirsty mob.
Madoff is accused of running an unprecedented global financial fraud. His investors included hedge funds, banks, Jewish charities, the wealthy and small 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 judge said victims would be allowed to address only issues of the plea or bail at the proceeding in which gray-haired, 70-year-old Madoff could be required to stand and say guilty numerous times.
Prosecutors may ask Chin to jail Madoff, revoking $10 million bail and removing him from house arrest in his luxury Manhattan apartment, until sentencing.
William Devaney, a former federal prosecutor and now an attorney for white-collar defendants, said it was highly unusual to have victims address the court at this stage but this is an unusual case in terms of the audacity of the crime.
The statements of victims are usually heard at sentencing.
Chin said he would sentence Madoff in coming months and that victims would also be allowed to be heard then or before on sentence, forfeiture and restitution.
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.
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.
Regulators had no idea a massive fraud was occurring right under their noses, U.S. Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, told a U.S. Chamber of Commerce event in Washington on Wednesday.
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.
Each of Madoff's court appearances have been marked by a frenzy of photographers, TV crews and reporters.
TV satellite trucks have been parked outside the courthouse since Wednesday.
The case is USA v Madoff 09-213 in U.S. District Court for the Southern District of New York (Manhattan)