Bernie Madoff’s lawyer, Ira Sorkin, told a federal Judge Denny Chin on Tuesday that Madoff expects to plead guilty to charges that will put him in prison for up to 150 years.
The U.S. attorney’s office has filed 11 counts against Madoff for his part in the decades-long Ponzi scheme, now estimated in court documents to amount to $64.8 billion, considered the largest in history. In fact, the new dollar amount cited in a Justice Department communication to Sorkin tallies the total size of the fraud since the 1980’s at $170 billion, which includes money invested with him, interest earned and payouts to investors, as well as the value of things he bought for himself such as a yacht. “The charges reflect an extraordinary array of crimes committed by Bernard Madoff for over 20 years,” said Acting United States Attorney Lev L. Dassin in a statement.
“While the alleged crimes are not novel, the size and scope of Mr. Madoff’s fraud are unprecedented,” Dassin said. “As a result, Mr. Madoff faces 150 years in prison, mandatory restitution to the victims of his crimes, forfeiture of his ill-gotten gains and criminal fines. The Government has not entered into any agreement with Mr. Madoff about his plea or sentencing,” he said. “The filing of these charges does not end the matter. Our investigation is continuing.”
The unexpected guilty plea without a plea deal, the multiple counts — which include mail fraud, wire fraud, securities fraud, money laundering, among others — and the potential prison term were revealed at what was supposed to be at minor hearing about a potential conflict of interest between Madoff and his lawyer, Sorkin. Sorkin and Sorkin’s father, now deceased, once invested with Madoff. The judge waived the conflict.
Though a plea deal was widely anticipated, none was ever reached, according to U.S. attorney papers filed with the court. The government apparently never offered a plea deal or one fell apart.
During the hearing, Judge Chin asked Sorkin if it was his “expectation that will plead guilty” at the Thursday hearing.
“That’s a reasonable expectation,” Sorkin, replied. Judge Chin then said that he would decide at Thursday’s hearing whether to accept the guilty plea and whether to remand Madoff to jail pending sentencing in several months, setting the stage for Madoff’s climactic court appearance.
The U.S. Court in Lower Manhattan is bracing itself for a large crowd of Madoff victims to witness the Thursday hearing first hand. The court is preparing two additional overflow courtrooms with television monitors and additional guards to accommodate up to 300 people, according to the judge’s spokesperson.
Since reports of the pending plea agreement hearing surfaced late last Friday, the Justice Department began the process of gathering victims to speak at the hearing, saying on its website that they have the right to be “reasonably heard” at any public proceeding “involving release, plea, sentencing, or any parole proceeding.” The posting requires notice “prior to a plea proceeding scheduled for March 12, 2009.”
If things go according to plan, Madoff, 70, will spend the rest of his life behind bars at a federal prison. The Bureau of Prisons decides where a criminal ends up, based on a formula and any special security needs. One possible spot is the medium-security facility in Otisville, N.Y.. Often referred to as Club Fed, the prison is situated 70 miles northwest of New York City and generally handles white-collar criminals in the Southern New York Judicial District.
In such low and medium security prisons there are no locked doors, no steel grills, and no gun towers. Since his December 11 arrest, after he admitted his “big lie” to his sons and the FBI, Madoff has been confined to his $7 million Manhattan penthouse.
If the judge agrees to Madoff’s guilty plea on Thursday, there could be a delay of six months or more before sentencing, according to Isabelle A. Kirshner, former assistant district attorney and now partner at Clayman & Rosenberg, New York.
“It’s possible he could be jailed immediately after his plea hearing this week,” said Kirshner. “He’s certainly had enough time to get his things in order.” If this happens, Madoff would first be sent to either the Metropolitan Correction Center, across from the courthouse, or to Brooklyn’s Metropolitan Detention Center, she said.
Though there is a mountain of evidence and plenty of victims in this case, a guilty plea saves a lot of time and money for the government, according to Kirshner. But still, according to the former prosecutor, Litt will want to “know the method of the crime, how it went undetected, where the money went, where it’s hidden, if any, and who’s involved.”
Without a plea deal, Litt is now free to pursue all those potentially involved in the crime, including Madoff’s family members and associates. Madoff has already forfeited millions from his company, personal assets, such as homes, boats, planes, and artwork. His wife Ruth Madoff is fighting to keep the penthouse and some $62 million in other assets, claiming they are not part her husband’s property. See TIME’s Pictures of the Week.
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