Madoff Plea Deal May Be In The Works

(CBS/AP)  Prosecutors filed court papers Friday indicating Bernard Madoff may be ready to plead guilty to charges arising from one of the biggest financial frauds in history.

Madoff, 70, is scheduled for court twice next week, including a Tuesday appearance to waive any potential conflicts of interest involving his lawyer, and a Thursday morning arraignment. A defendant must enter a plea - guilty or not guilty - at an arraignment.

The U.S. attorney's office suggested Friday in a brief court filing that the money manager is ready to waive an indictment and one of Madoff's lawyers said he had already done so. A waiver of indictment is a necessary procedural step before a defendant enters a guilty plea.

Prosecutors have a deadline of next Friday to bring an indictment against Madoff under the speedy-trials law.

Madoff has been confined to his Manhattan penthouse since his arrest in early December after authorities said he told his family that he had engaged in a $50 billion fraud. Authorities have since said money lost by investors might be less than $17 billion and the higher amount may represent false profits.

Madoff has never contested the allegations and recently surrendered millions of dollars in major assets, actions that typically precede plea deals.

"This probably means a plea deal and if that's the case we shouldn't at all be surprised," said CBS News legal analyst Andrew Cohen. "Madoff already settled the SEC case against him, he's never denied the core of the allegations against him, and he's got a wave of civil lawsuits coming his way once his criminal problems are resolved.

"There's no way to evaluate a plea deal until we know what its details are - whether Madoff is pleading guilty to something that would land him in jail, what sort of restitution is going to come back to the government and what sorts of facts will be conceded in advance of the civil lawsuits that are sure to follow," Cohen added.

"Any deal would have to be approved by a federal judge so even if and when the parties agree to some sort of settlement there is still an overcheck on the process," Cohen said.

Investigators have spent the last three months trying to untangle Madoff's complicated financial operation while attempting to return what is left of his assets to investors who lost billions. Madoff's cooperation could be key to explaining the mysteries and intricacies of his business, and also explain if others were involved in the fraud.

Daniel J. Horwitz, a Madoff defense lawyer, would only say "we've waived the right to indictment and the case will proceed by information."

Typically, a defendant is brought before a judge, waives indictment and enters a guilty plea the same day to a charging document known as an "information." It resembles an indictment but is brought by prosecutors rather than a grand jury.

Prosecutor's spokeswoman Rebekah Carmichael declined to comment.

Matthew Fishbein, a former chief of the criminal division in the federal prosecutor's office in Manhattan who is now in private practice, said a waiver of indictment is often followed quickly by a guilty plea but it does not have to be imminent.

"This seems to be a more complicated information and more back and forth going on. It may simply be that this basically buys them some time," he said.

Madoff already has surrendered rights to his business and any of the assets held by the business. A trustee overseeing his assets said he has identified nearly $1 billion in assets that are available to reimburse investors who have lost money.

Shortly after his arrest, Madoff offered to relinquish many of his and his wife's assets, including properties in Palm Beach, Fla., and Antibes, France, as well as his boats and cars, according to a Jan. 13 court filing signed by Horwitz and fellow defense attorney Ira Sorkin.

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The deadline for victims of the Ponzi scheme to submit claims for compensation for their losses is July 2. How much money individuals can recover will be determined on a case-by-case basis, but one thing is certain: There is nowhere near enough money to go around, reports CBS News chief investigative correspondent Armen Keteyian.

At best, there appear to be about $5 billion in assets to cover an alleged $50 billion fraud. And that has left many victims with a bleak realization: their hope that the government will somehow recover their life saving is the only hope they have left.

Far beyond the Hollywood crowd and moneyed retreats of Palm Beach, Fla., the Madoff loss is most felt in places like a Fairfield, Conn., medical practice, where there's no cure for how sick folks feel.

"Never, never in a million years did I think that I would have nothing," said Linda Alexander, a billing specialist who scrimped and saved for 22 years to contribute to her retirement plan, putting away hundreds of thousands of dollars in all.

[penmarko]

Yes it was a terrible thing he did and he deserves what he gets. But when you invest it is a gamble, win or lose. Of course this was not a fair loss and it caused many people to lose all their money. What I am wondering is why in the first place would anyone invest millions of dollars? I can think of better things to do with my money. The rewards of giving to people that need it or organizations that are desperate would far outweigh the agony everyone that loss money is going through right now. America has turned into a nation of greed. You gambled, you lost, and that is the bottom line. Ever go to Vegas and put money into a slot machine and lose it all? Then blame it on the machine? Same thing, only this machine is named Madoff. Lick your wounds and take a look around at the real world and maybe you will think twice about your next investment. And remember what doesn't kill you makes you stronger.

[sedean1]

It isn't hundreds of people affected, it is thousands, and it isn't millions of dollars, but billions, fifty billion according to the news reports. Madoff should be begging for his life, and every dollar and every asset under his name and what he gave away should be attached for compensation for all the people he has robbed. Anyhting less is a crime!

[walt1944]

Why do I get the feeling that "Uncle Bernie" is going to walk away from all this with just paying a small fine, a promise never to do it again, and, of course, no jail time?

Maybe, he might even get a seat back on the Wall Street board again, so he can teach up and coming Wall Streeters on the finer points of "I CHEAT 'EM AND HOW!!"!

Of course, if "Uncle Bernie" had done this in China, he would be shaking hands with his great ancestors in that "Great Stock Market In The Sky" by now, but he did it here, with implicit blessing by the SEC, so you know that, in order to prevent a bigger "can of worms", Madoff will go free and untouched, and thousands of people will kiss goodbye to all their money they lost!

ONLY IN AMERICA!!!

HAIL OBAMA!!!

[grabandgo]

Our justice system is a joke. thuis gu should be pleading to keep his head.

[brianbwb-2009]

"... It is about time the elitist judges become judges and do judgment." Posted by clancy49

Nice idea, but in reality if there was such a thing as honest judgment in the US, most of the judges would also be in prison breaking rock, for their contributions to the creation of an American aristocracy where rich criminals act with impunity.

It is after all, the history of biased sentencing by these judges that created this situation where these criminals can do what they do, because they know that should they be caught, the sanctions for their crimes will still leave them ridiculously wealthy..

[brianbwb-2009]

Seems that Madoff has become the "Burning Man", to be effigized for what is actually a very common activity on Wall St., duping investors out of their money.

An investigation into every investment firm on the street would do much to show people how they have been suckered all these years, and then any news about the stock market will finally lose the sense of false relevance to the real economy.

Of course if you are so greedy that you still believe that putting your hard earned money into Wall St. is a good way to make money you haven't worked for, then you deserve to be taken to the poorhouse ny those criminals.

[clancy49]

Why is it in America that a poor man stealing a loaf of bread to feed his family is thrown in jail for years to do hard time and a man that destroys hundreds of lives and steals millions gets a plea bargain? The more money you steal the less time you pay and the more luxurious lifestyle you live. This says a lot about America, doesn't it? We need a Robin Hood. Remember King John? He hung a peasant for killing a deer to feed his family while the king gorged on seven course meals and took more and more gold. Here is the symbolism. America no longer has a democracy. Slowly we are returning to the Dark Ages of serfs and Lords. Can this be changed? Yes! No plea bargain. From henceforth all criminals will do hard time in hard prisons. The greater amount stolen, the greater amount of hard time. I don't care if Madoff is 70. He can die breaking rocks. It is about time the elitist judges become judges and do judgment.

[hhamsllc]

Of course he's going to take a plea. 6 months of house arrest, then sentencing by a friendly judge for 90 days to Club Fed. He has $100 million stowed away. His good buddies at the SEC, friendly judges and prosecutors will insure he has no discomfort.

His son in law was a long time employee at the SEC , how do you think he skated for so long.

[erb0087]

People who personally would not be able to forgive a slap in the face, are willing to forgive Bernie Madoff on behalf of his victims.

[erb0087]

Several men have been driven to suicide by his crimes.

And a number of charities have been crippled or shut down because of him.

Hatred for this man is understandable.

RE: "And the man was taking care of his family too. Was he running around ? On drugs ? No, Did he kill someone ? No. So why such hate ?"
Posted by hamiltongrad at 6:29 PM : Mar 6, 2009