Prosecutors: Madoff Wanted To Unload $173M

Disgraced Financier Allegedly Tried To Keep Assets Away From Burned Investors Before Arrest

(CBS/ AP)  Prosecutors said Thursday that investigators found 100 signed checks worth $173 million in Bernard Madoff's office desk that he was ready to send out to his closest family and friends at the time of his arrest last month in what is alleged to be largest financial fraud in history.

The detail was provided in a court filing Thursday as prosecutors argued that Madoff should have his bail revoked and be sent to jail. They said the checks were further evidence that he wants to keep his assets away from burned investors in a more than $50 billion fraud.

Attorneys for bilked investors say Madoff should never have been granted bail in the first place, reports CBS News correspondent Randall Pinkston.

"My clients are going to go homeless and this guy is sitting in a luxury apartment in Manhattan. It seems a little unfair," said attorney Brad Friedman.

In the filing, Assistant U.S. Attorney Marc Litt said Madoff cannot be trusted because he had long engaged in a "scheme that required the defendant to lie routinely to thousands of people and a scheme which has caused extraordinary damage to individuals, families, and institutions all over the world."

The judge was expected to rule Friday or Monday whether Madoff should be sent to jail or remain free on bail, confined to his luxury Upper East Side penthouse with an electronic ankle bracelet and under 24-hour guard.

Defense lawyers say bail should not be revoked because he is not a risk to flee or a danger to the community.

The court developments came as regulators in Britain opened an investigation into the British business operations of Madoff, raising the prospect that he could face charges there. The fraud office, which is cooperating with its U.S. counterparts, said its investigation would focus on British victims and "any criminal offenses that might have been committed in the U.K."

Madoff delivered impressive returns to investors for decades before authorities say he told his sons that it was "all just one big lie" and "basically, a giant Ponzi scheme." He's accused of blowing more than $50 billion, paying early investors with proceeds from those who entered his investment scheme later.

Investigators previously have said that Madoff had planned on distributing $200 million to $300 million to his closest friends and family after he realized his scheme had unraveled. The $173 million in checks appears to represent part of that $200 million to $300 million.

He was also accused of sending more than $1 million worth of jewelry as gifts to friends and family over the holidays, prompting prosecutors to ask a judge to revoke his bail.

The jewelry included diamond-encrusted Tiffany and Cartier watches and a jade necklace, Pinkston reports.

Prosecutors say Madoff presents "grave" economic harm to the community because of the wide range of his alleged fraud, and they cited the attempt to distribute some of his wealth in the past month as proof of the damage he could do.

The letter was a response to a letter defense lawyers had submitted to Magistrate Judge Ronald L. Ellis in federal court in Manhattan on Wednesday.

The defense lawyers had noted that Madoff and his wife had offered to give up their assets, including four properties in Manhattan, Montauk, N.Y., Palm Beach, Fla. and Antibes, France, along with four boats and three cars. The U.S. properties alone were estimated to be worth more than $19 million.

"Mr. Madoff's conduct ... is not the conduct of a man who is unwilling to face justice in this matter," the lawyers wrote, noting that Madoff encouraged his sons at the outset to tell the authorities of the exact nature of his fraud and that he planned to turn himself in.

Litt wrote that Madoff's "effort to paint his pre-arrest actions in heroic terms should be viewed with great skepticism."

The prosecutor said the defense claim that Madoff's holiday gifts were merely an attempt to reach out to his immediate family and close friends with whom contact had been cut off was "preposterous."

"That's what telephones, e-mails, and personal letters are for," Litt wrote. "Given the many ruptured relationships of the defendant, and their depth, one only can imagine the value of the items that might have been included in the defendant's next set of mailings, had he determined that his attempted transfers in late December had failed to achieve their purpose."

Madoff's lawyer, Ira Sorkin, declined to comment Thursday.

[lochlan-2009]

Sixty posts here, and everyone of them seem to know the truth about American justice. Yet, the fraud and corruption and tiers of justice continue, unabated.

Imagine that. Just can''t stop it, even when everybody knows.

[marinecwo2]

Madoff is a crook but he is just the tip of the iceberg. look at how many more have been caught since this story broke. America is paper rich and everything is a shell game. We move money from one spot to cover another spot. We do it in our government so why shouldnt this guy feel like he is allowed to do it??? Why is he not being charged for the deaths of the people who have committed suicide over this?? The government wants to throw someone in jail for bullying someone over the internet but this guy...nothing!!!

[ahrats]

I''ll bet the judge on the case lets him go home and not to jail since they probably were aquantaces at one time, or lunched together several times or Bernie gave him some finanical advice. Bernie does not care who he hurt or that someone killed themselves over HIS ponzi scheme. N.Y. crimanal system is a joke if your a wall street person you get to walk around, anybobd eles you go to jail. How many other Madoff''s are running loose with their own ponzi scheme''s on wall street. The SEC is also a joke. Bernie you have no soul, all you care about is keeping as much of the money you stole from others so your family can live the good life and those you stole from suffer. I hope you stole some MOB money they know how to deal with people like you, does Acid come to mind thanks to Mr Gotti.

[straightmate]

Sell a little grass and you can do twenty years, steal 50 billion from the US charity-stay in a penthouse,warm and cozy, wear tailor made suit, ect. You all see something wrong here. Our legal system is a JOKE

[grandesign]

WHERE IS THE PUNISHMENT????????????
Posted by MrNegrodamus at 09:51 PM : Jan 08, 2009

In America, we don''t punish white collar crime; we give them bail outs with taxpayer money.

[donevis-2009]

------------------ (Don''''t know why. The ABC News has blocked my ids from posting comments on its site. They also deleted some of my comments. And they refuse to tell me why. I read the CBS news more often now. Guess the freedom of speech is no longer in ABC News'''' vocabulary.)
--------------------------------------------------------------------------------
Posted by cbs_bull at 06:39 PM : Jan 08, 2009

I had an experience of the same nature on WTOPs sight.
Starting to appear that Madoff maybe part of a hugh ring of people high up. It''s alledged that duel citizenship seems to be of preference to these alleged elite members. Is this Gaza war being waged to divert attention away from daily revelations of what damaged has been done to our economy and where the investigations are leading? "God Speed USA"

[caldwellptr]

And the punch line is -

"If Princess Margaret was with us we could have saved the tiara."

[lili5044]

I loved the idea of giving this thief a rope and a chair in his jail cell. It ought to do the trick!!

[cbscrash072]

Jails to good for him. Take everything he has and turn him out on the street. let him eat out of garb.... actually I don''t care. He ripped of stupid rich people. I would much prefer to see the feds go after those people in Nigeria who are ripping off the little guy. But thats the problem there smart enough to steal from the little guy who no one cares about. Don''t steal from the rich the government doesn''t tolerate that. We all know its true. When is the last time you saw a political candidate have a private fund raiser with ordinary everyday people?

[cbs_bull]

It''s clear that Madoff is being treated in the way that many powerful and rich crooks want to be treated exactly if they got caught for their crimes. Our system is totally broken here and it''s time to change it. Wake up, Americans!
------------------ (Don''t know why. The ABC News has blocked my ids from posting comments on its site. They also deleted some of my comments. And they refuse to tell me why. I read the CBS news more often now. Guess the freedom of speech is no longer in ABC News'' vocabulary.)

[carpriddler]

I have scooped CBS with the Madoff defense. 1. He will find Jesus. 2. He will donate money to sick children. 3. He did it to save Siberian Jews. 4. All his customers signed a disclaimer and an agreement. 5. He was the victim.

[hsinco-2009]

If he doesn''''t commit suicide maybe someone should assist him.


--------------------------------------------------------------------------------

Posted by airboatboy1 at 06:17 PM : Jan 08, 2009

Only after he spills his guts about where to go find the loot!

[airboatboy1]

If he doesn''t commit suicide maybe someone should assist him.

[steeepe]

I still can''t believe that he is granted liberty after ruining so many lives. $50B, and house arrest is all?? I guess that all perpetrators of larceny from now on should just be obliged to stay home instead of waiting in jail for trial. Is it even possible to steal more than $50B? This has to be the greatest theft in history, and he gets house arrest? There''s a different justice for rich people....

[watercam]

Sombody should put a rope and a chair in to his cell.

[berniepeders]

If it had been you or me who had embezzled $50B of other peoples money we''d be in jail....not hanging out under guard in our 5th Avenue apartment....this just doesn''t make any sense. Posted by jsl45

I beg to differ, friend. If you had embezzled fifty billion dollars, you would be a very rich and therefore powerful person. Like I said before, rich and powerful people DO NOT spend time in prison here in the U.S. I don''t like it either, but that''s how the system works.
Peace

[berniepeders]

If I was running a game of 3 Card Monty on Canal St and took somebody off for $500.00 I would be sitting in Rikers. Why is this guy not in jail? Posted by johndevinejr

Seriously john, you don''t understand that money is power here in the US? Powerful, rich people do NOT spend time in jail. That''s just the way it''s done. It sucks, and I hate it, but what are you gonna do?
Peace

[abrame]

... and everyone that said he''''s innocent until proven guilty... you still thinking that? !!!
If so.. you are morons!
Posted by peetre

The fundamental right

This right is so important in modern democracies that many have explicitly included it in their legal codes and constitutions:

--The Convention for the Protection of Human Rights and Fundamental Freedoms of the Council of Europe...(art. 6.2)...

--In Canada, section 11(d) of the Canadian Charter of Rights and Freedoms...

--In France, article 9 of the Declaration of the Rights of Man and of the Citizen, of constitutional value...

--Although the Constitution of the United States does not cite it explicitly, presumption of innocence is widely held to follow from the 5th, 6th and 14th amendments. See also Coffin v. United States

--In the 1988 Brazilian constitution, article 5, section LVII...

--The Universal Declaration of Human Rights, article 11,

http://en.wikipedia.org/wiki/Presumption_of_innocence

[nincomp]

If it had been you or me who had embezzled $50B of other people''''s money; we''''d be in jail....not hanging out under guard in our 5th Avenue apartment....this just doesn''''t make any sense.

Posted by jsl45 at 05:15 PM : Jan 08, 2009
+

It will make sense to you if you know that there are always exceptions (written or oral) for Jews in US laws. It''s just that now it''s getting difficult to hide them.

During 94-95, plane loads of Jews came from former Soviet Unions, landing at LAX and passengers were given immigrant status, no questions asked. How else do you think NYC is now full of Russian Jews where none existed before.

[carpriddler]

I find it amazing that the criminal act isn%u2019t what counts, it how you go about being a criminal. The man commits what could be the largest heist in history and he%u2019s riding around in a limo after putting up a token bond in comparison to his crime.