Madoff To Remain Locked Up

Appeals Court Rules Disgraced Financier Will Remain In Jail Pending Sentencing

(CBS/AP)  Disgraced financier Bernard Madoff will remain in prison until he is sentenced in one of the largest financial frauds in history.

The 2nd U.S. Circuit Court of Appeals on Friday backed a lower court ruling a day after hearing arguments from a lawyer for the 70-year-old former Nasdaq chairman who sought Madoff's release from jail. The government argued against freeing him.

The appeals court said U.S. District Judge Denny Chin was correct when he sent Madoff to prison last week immediately after Madoff confessed that he had defrauded thousands of investors of billions of dollars for at least two decades. Investors who had trusted him were outraged that until then, Madoff had been confined to his penthouse apartment since his December arrest.

Chin had cited Madoff's age and said the possibility of life in prison heightened his incentive to flee. Madoff faces up to 150 years in prison at sentencing, scheduled for June 16.

"The defendant's age and his exposure to imprisonment are undisputed, and the court did not err in inferring an incentive to flee from these facts," the three-judge panel wrote.

"Moreover, the district court's finding that the defendant has the means — and therefore the ability — to flee are not clear error. The defendant has argued that all of his assets are accounted for and are inaccessible to him; however, the district court was not required to treat this defendant's financial representations as reliable," the judges said in the four-page ruling.

The court noted that Madoff has a residence abroad and "had had ample opportunity over a long period of time to secret substantial resources outside the country."

The court appeared to agree with an argument Assistant U.S. Attorney Marc Litt had made in January, when he tried to have Madoff imprisoned before his guilty plea by saying he posed a danger to the community because of the harm he could cause financially.

Litt did not press that argument before the appeals court on Wednesday, but the panel of judges raised it anyway in its decision.

"We note that there was substantial evidence in the record to support a finding by the district court that bail should be denied to the defendant because he had failed to prove by clear and convincing evidence that he does `not ... pose a danger to the (pecuniary) safety of any other person or the community if released,"' they wrote.

Ira Sorkin, Madoff's lawyer, declined to discuss whether he might appeal the issue further.

"We are disappointed," Sorkin said. "We respectfully disagree with the court but the court has ruled."

Janice Oh, a spokeswoman for prosecutors, said the office had no comment.

Madoff pleaded guilty last week to securities fraud, perjury and other charges. Until his plea, Madoff had been under house arrest on $10 million bail, confined to his $7 million penthouse apartment in midtown Manhattan.

Madoff notified 4,800 clients of his investment advisory business in November that they held nearly $65 billion in their accounts. Investigators say they have located only about $1 billion and believe investors entrusted Madoff with less than $20 billion. They say it is likely that the higher numbers were the result of Madoff adding fictitious profits over several decades.

The appeals court noted in its decision that a defendant who has been convicted no longer has the same constitutional right to bail that exists when there is a presumption of innocence.

A conviction puts the burden on a defendant to show by clear and convincing evidence that he will not flee or pose a danger to the safety of others or the community.

On Wednesday, Madoff's longtime accountant, David Friehling, was arrested on fraud charges for allegedly failing to make the basic auditing checks that would have exposed the epic fraud.

Friehling was the first person arrested in the scandal since Madoff turned himself in last December. His prosecution signaled the government's intention on bringing Madoff's associates to justice.

"This legal standard doesn’t just spell trouble for Friehling. It also ought to make many other Madoff men and women, instruments to the crime, quake in their Guccis," said CBS News legal analyst Andrew Cohen.

Prosecutors say the 49-year-old Friehling, who was employed as Madoff's auditor from 1991 through last year, essentially rubber-stamped Madoff's books for 17 years.

Though Madoff in November reported to 4,800 investors that they had $65 billion in assets, investigators have found only about $1 billion.

[quickly101]

Aint it a shame.

[popeye_1]

Hey Bernie, I have a title on mind in case you write a book: 'Once a Jew, always a crook', or maybe 'How to screw other Jews' (ie: Spielberg, Zuckerman)

[gce651]

Put his head on a pike down at Battery Park.

[Solarrays247]

yea but he apoligized so that makes it right...just ask the libs defending obama on his distasteful remark about special olympians..... "he apoligized, so that makes it ok that he disrespects the disabled"
Posted by jwind1

You absolute idiot! You are comparing the largest financial scandal in the history of fraud, with a comment that a guy said he sucked at bowling so much, it was like a special olympics game? You are disgusting
Posted by texasbeta at 1:54 PM : Mar 20, 2009

Thanks, texasbeta! You took the words right out of my mouth.

[underdogcity]

I couldn't believe how his lawyers were trying to get him released! I'm sure in the past, his big money always worked in his favor.

He wants to take the full rap for what he has done...probably his reasoning for not running away while he had the chance, and hoping to keep his family from becoming implicated in his crime too. So while he claims his family is innocent of any wrong doing, that remains to be seen in the coming months ahead.

[nirak2-2009]

I am glad they keep him locked up. They should throw away the key for this guy and his wife should be in the cell next to him.

Just as we have the concept of present worth for money, we have to introduce the concept of present value of punishment. The critical parameters are the elapsed time between crime and its discovery and the efforts of the government and other victims to bring a criminal to book. Let us say that a person were to be awarded a certain amount of time in prison for a particular crime according to the current laws on the books. If one year lapses between the time the crime is committed and the sentence is pronounced, the punishment should be increased by (say) 10 percent according to this concept. The criminal is expected to pay court costs and prosecution costs on some basis of apportionment. Whether or not the criminal is able to pay such costs is a different issue. If a person steals a billion dollars and lives like a prince for twenty years, he should live a hard life for a long time after he is caught, tried, and sentenced. Under the current legal processes, once a person gets possession of a billion dollars, he can engage the best lawyers and tactics to keep enjoying that ill-gotten money till he can argue that he is old. There must be incentives to make criminals confess to their crimes soon after they commit a crime.

[walt1944]

"Uncle Bernie" Madoff is devastated after learning he must stay in prison while waiting sentencing.

He had hoped that a judge with neocon Fascist Nazi Republican leanings would let Madoff go so that he could enjoy the comfort of his penthouse while his army of lawyers try and continue to find another "trick" up their sleeves to keep Madoff out of jail, and receive a "lenient" sentence.

Unfortunately for "Uncle Bernie", the judge did not rule in his favor, and Madoff will have to stay in jail until his sentencing in June, at which time he is expected to receive 150 years and be sent to a country-club prison where he can devote his remaining years to writing his book entitle "I Cheat'Em and How!" and its sequel "How to Succeed at Ponzi Schemes Without Really Trying!".

Madoff's attorneys anticipate that the books will be best sellers, particularly on Wall Street and among executives in the finance industry (??) in Corporate America.

HAIL OBAMA!!!!

[texasbeta]

yea but he apoligized so that makes it right...just ask the libs defending obama on his distasteful remark about special olympians..... "he apoligized, so that makes it ok that he disrespects the disabled"
Posted by jwind1

You absolute idiot! You are comparing the largest financial scandal in the history of fraud, with a comment that a guy said he sucked at bowling so much, it was like a special olympics game? You are disgusting

[arohanui-2009]

There will be no satisfactory outcome in this one. Yes he will finally do jail time and so he should! He lived a life most of us could not even begin to imagine and his family will continue to do so which will gall the people he ripped off no end. Ill gotten gains should not be used by the family either!!! Shame on you all Madoff Family. Shame on you!

[czechtraveler]

a guy like him will go nuts in prison...

[czechtraveler]

I can't believe he didn't run......he knew he was going to prison for life.....i'm surprised he did not have a plan to flee once the government was on to him.......he must have thought he would never get caught

[sndkzyaa]

The rich get richer

And the rest of us get Madoff'ed!

This guy scammed for 20 years. That's all the way back to the 1980's. Three presidents.

And he got turned in on a silver platter to the SEC - repeatedly - starting in 2000. But he was ignored.

The purpose of the SEC is to stop people like Madoff.

Instead they gave him the royal treatment.

We have not had a functioning government of the people for that long.

[Questionews]

He can always start working in the prison industries making $1.50 a day. It'll give a chance to earn all that money back.

[ozilot]

I'd say let Bernie have his home arrest while he waits for sentencing...but he must share his space with NYC's drunk tank population to alleviate overcrowding in NYC's jails!

[get_down]

Sooo it actually took The appeals court four-page to rule on Bernard Madoff's lawyer's request that he should be granted a bail?
I believe all Bernard Madoff's victims would be glad to hear one sentence - "The defendant's request for a bail is unanimously denied!"

[122049]

I disagree, I don't think jail will serve as a punishment for the guy, why not make him pay everyone back that he swindled, that would hurt him because he is so greedy. It ticks me off because I'm sitting here can't purchase a car, because I can't afford a down payment, so I'm walking, you got this greedy person with all of this money in hiding.

[afmcalax]

There is justice ... although a tad late!

[greywolf10]

Poor Bernie,

I just hope the rest of those involved get their just rewards in jail also. Starting with his wife and kids. What a bunch of scammers and thieves. They should do us all a favor and take the assests and then shoot them.

[iam4honesty]

Bernie has moved from one multi million dollar apartment to another.