Prosecutors indicate Madoff plea may be in works
Disgraced New York financier Bernard L. Madoff may be nearing a deal to plead guilty to one of the most egregious financial crimes in history.
Prosecutors who have charged him with operating a $50-billion Ponzi scheme notified a federal judge Friday that Madoff had agreed to forgo a grand jury hearing, a step that is typically a precursor to a plea agreement.
“He’s going to say under oath, ‘I did it,’ and that’s a huge step in the process,” predicted Steven D. Feldman, a criminal defense attorney at Herrick Feinstein in New York.
An arraignment is scheduled Thursday morning before U.S. District Judge Denny Chin in Manhattan.
In court papers submitted Friday, prosecutors said they would file a charging document known as an “information” against Madoff, who already faces the prospect of a lengthy prison term. The document is expected to include additional fraud charges, each carrying a maximum 20-year sentence.
Madoff has not yet entered a plea.
It’s not known whether Madoff has agreed to plead guilty as part of a deal with prosecutors, in which the federal government would agree to seek a lighter sentence in return for his cooperation in unraveling his case and identifying others who may have assisted him.
Several experts said they doubted that the government would make such a concession, saying it’s more likely that Madoff, 70, had decided to plead guilty in hopes of currying favor with the judge to avoid a lifelong prison sentence.
“Any time somebody’s best defense is to quickly go into court and plead guilty means there is no defense,” said Chris Steskal, a partner specializing in white-collar crime at Fenwick & West in San Francisco. “It looks like, at the end of the day, his best play was to plead guilty and beg for mercy.”
Most legal experts believe that Madoff will spend many years in prison, but a few think he may do little prison time if he can delay sentencing while the government pursues other people connected to the alleged fraud.
By that time, public outcry about the Madoff scandal would subside and Madoff could argue that he was a frail and elderly man, said Brad Simon, a New York defense attorney.
“It’s not inconceivable that Bernie Madoff could avoid doing one day in jail,” Simon said.
The potential guilty plea also may be part of an effort to persuade prosecutors to allow his wife, Ruth Madoff, to keep almost $70 million in assets, including their apartment, if he is convicted.
Some experts doubt that would happen.
“The only way the government will agree to allow Mrs. Madoff to keep any significant amount of money is if they’re genuinely convinced -- and believe the public will be genuinely convinced -- that she has substantial independent money that was not earned from the fraud scheme,” said Joel Cohen, a white-collar defense lawyer at Clifford Chance in New York.
Madoff was arrested Dec. 11 after allegedly admitting to his two sons and later to the government that he ran a years-long Ponzi scheme that duped thousands of investors around the world.
The trustee overseeing his case said last month that Madoff had not made investments on behalf of clients for the last 13 years.
Madoff is confined to his Upper East Side apartment under the terms of his bail.
Daniel Horwitz, Madoff’s attorney, said “the filing speaks for itself.” He declined to comment further.