NEW YORK – After decades of claiming to make investments worth tens of billions of dollars, Bernard Madoff sat quietly in a packed Manhattan courtroom Tuesday while lawyers discussed another astounding figure: 150 years.
The announcement of the estimated maximum prison sentence for Madoff – combined with a confirmation he would plead guilty – was a bombshell in a case that’s already drawn international attention. It turned a mostly mundane hearing into a dramatic preview of a guilty plea scheduled for Thursday.
Both the government and Madoff’s attorney, Ira Sorkin, said the disgraced financier would plead guilty to all 11 criminal counts he faces, including securities fraud, money laundering and perjury in the gargantuan fraud.
“While the alleged crimes are not novel, the size and scope of Mr. Madoff’s fraud are unprecedented,” U.S. Attorney Lev L. Dassin said in a release.
Authorities said he confessed to his family that he had carried out a $50 billion fraud. In court documents filed Tuesday, prosecutors raised the size of the fraud to $64.8 billion, saying Madoff’s records falsely claimed that amount was in 4,800 client accounts in November.
Experts say the actual loss was more likely much less and that higher numbers reflect false profits he promised investors. So far, authorities have located about $1 billion for jilted investors.
Prosecutors reserved the right to pursue more than $170 billion in criminal forfeiture, according to court documents. That represents the total amount of money that could be connected to the fraud, not the amount stolen or lost.
In his own court filing Tuesday, Sorkin said the government’s forfeiture demand of $177 billion was “grossly overstated – and misleading – even for a case of this magnitude.”
Sorkin said Madoff had paid redemptions to investors, “a number likely in the billions.”
Tuesday marked the first time the 70-year-old Madoff had appeared in public in nearly a month. A crush of cameramen held back by police barriers greeted him when he arrived at court more than three hours early – a move meant to avoid any nasty run-ins with angry investors.
Most of the hearing was spent with U.S. District Judge Denny Chin asking Madoff a series of questions about whether he understood that a $900,000 investment made with him on behalf of his lawyer’s sons created a potential conflict of interest. Though the sons got their money back before the fraud was exposed, some of the funds still could be subject to redistribution to victims.
Madoff he rose from his seat to be sworn in and give his name.
On the question of his lawyer’s possible conflict, he said, “I understand that potentially on issues of restitution, his interest might be divided.”
The judge asked: “Is it your wish to continue with Mr. Sorkin in this case?” Madoff replied, “Yes, your honor.”
After Chin agreed to let Madoff keep Sorkin, he surprised the courtroom by having the attorney put on record what has been widely reported: that his client would plead guilty. “To all 11 counts?” Chin asked. “Yes,” Sorkin replied.
At that point, Assistant U.S. Attorney Marc Litt revealed that because there was no cooperation agreement with Madoff, he could face up to 150 years in prison.