U.S. prosecutors ask judge to imprison Madoff for life

By @ibtimes on

Swindler Bernard Madoff should spend the rest of his life in prison, U.S. prosecutors argued on Friday, citing the unique scope and duration of his crimes as the leader of Wall Street's biggest fraud.

Madoff will be sentenced on Monday after pleading guilty in March to 11 criminal charges including securities fraud, money laundering and perjury in an investment scheme involving tens of billions of dollars.

Madoff's crimes were of extraordinary dimensions, the prosecutors' memorandum to a Manhattan federal court judge said. For example, the fraud loss known to date, which is greater than $13 billion, is more than 32 times the baseline level that would carry a sentence of life under the U.S. sentencing guidelines.

It said about $170 billion flowed into the principal account used by Madoff in his decades-long scheme. It said he bilked thousands of people and caused economic hardship to individuals, charities and for-profit institutions.

A reasonable sentence in this case would be the guidelines sentence of 150 years, or alternatively, a term of years that both would assure that Madoff will remain in prison for life, and forcefully would promote general deterrence.

The uncovering of the scheme and Madoff's arrest in December led to calls for stricter oversight of firms.

Madoff's lawyer Ira Lee Sorkin declined to comment on the memorandum because he said he had not yet read it.

The government argued that the Madoff case bore no comparison to corporate frauds of recent years such as WorldCom Chief Executive Bernie Ebbers and Adelphia's John and Timothy Rigas. Ebbers is serving 25 years and the Rigases 12 years and 17 years, respectively.

Madoff's conduct is unique in its scope and duration, the memorandum to U.S. District Court Judge Denny Chin said.

It also cited a June 25 letter from counsel for the trustee winding down Bernard L. Madoff Investment Securities LLC saying that Madoff had not cooperated.

Mr. Madoff has not provided meaningful cooperation or assistance to the Trustee since his arrest, the letter signed by lawyer David Sheehan said.

Madoff's lawyer, in papers submitted to the judge this week, argued a sentence of 12 years would be sufficient. Sorkin also asked the judge not to give in to the mob vengeance sought by those Madoff defrauded.

Sorkin cited a recent meeting between the jailed Madoff and the inspector general of the U.S. Securities and Exchange Commission as being helpful to regulators. But prosecutors said on Friday the official had informed the government that Madoff's information will not 'shape and fortify the future of Wall Street regulation and oversight.'

The government said statements sent to the court by defrauded investors, showed he was not only responsible for wiping away the financial resources of many generations within families but also for causing profound levels of stress and emotional injury.

In its memorandum on Friday and in other court papers, prosecutors said that as of November last year, Madoff's firm issued account statements that held a total of about $65 billion when in fact he had not bought any securities.

Madoff and his wife Ruth have agreed to the sale of three of their luxury properties and other assets and valuables, according to court documents filed separately on Friday.

The properties to be sold include the couple's $7 million apartment and primary residence in Manhattan, an $11 million house in Palm Beach, Florida and a $3 million home in Montauk on New York's Long Island. The Florida property and several vessels have already been seized by U.S. Marshals.

The case is USA v Madoff 09-213 in U.S. District Court for the Southern District of New York (Manhattan).

(Reporting by Grant McCool; Editing by Richard Chang)

Join the Discussion