Six months after the scandal came to light, the battle lines over Bernard Madoff's punishment have been drawn. His lawyer insists 12 years in prison is enough. Prosecutors demand a 150-year sentence that would guarantee the 71-year-old spends his final days behind bars.
Madoff entered the federal court in Manhattan shortly before 10:00 a.m. Ten victims informed U.S. District Judge Denny Chin that they wanted to speak at the hearing to call for harsh punihsment for the disgraced financier.
Madoff also "will speak to the shame he has felt and to the pain he has caused," his attorney, Ira Sorkin, said in court papers.
"We seek neither mercy nor sympathy," Sorkin wrote. But the lawyer urged Chin to "set aside the emotion and hysteria attendant to this case" as he determines the sentence.
There was no shortage of emotion in recent e-mails and letters to the judge by victims.
Carla and Stanley Hirschhorn wrote that they lost their life savings - "a living nightmare that we can't wake up from."
Miriam Siegman expressed outrage "at the spectacle of a man playing with his victims - thousands of them - who he knew were facing a kind of death, playing with them as a cat would with a mouse."
Prosecutors argued in court papers Friday that federal sentencing guidelines allow the 150-year sentence. Any lesser term, they said, should at least be the equivalent of a life sentence.
"The sheer scale of the fraud calls for severe punishment," the prosecutors wrote.
The jailed Madoff already has taken a severe financial hit: Last week, a judge issued a preliminary $171 billion forfeiture order stripping Madoff of all his personal property, including real estate, investments, and $80 million in assets his wife Ruth had claimed were hers. The order left her with $2.5 million.
The terms require the Madoffs to sell a $7 million Manhattan apartment where Ruth Madoff still lives. An $11 million estate in Palm Beach, Florida, a $4 million home in Montauk and a $2.2 million boat will be put on the market as well.
Before Madoff became a symbol of Wall Street greed, the former Nasdaq chairman had earned a reputation as a trusted money manager with a Midas touch. Even as the market fluctuated, clients of his secretive investment advisory business - from Florida retirees to celebrities such as Steven Spielberg, actor Kevin Bacon and Hall of Fame pitcher Sandy Koufax - for decades enjoyed steady double-digit returns.
But late last year, Madoff made a dramatic confession: Authorities say he pulled his sons aside and told them it was "all just one big lie."
Madoff pleaded guilty in March to securities fraud and other charges, saying he was "deeply sorry and ashamed." He insisted that he acted alone, describing a separate wholesale stock-trading firm run by his sons and brother as honest and legitimate.
Aside from an accountant accused of cooking Madoff's books, no one else has been criminally charged. But the family, including his wife, and brokerage firms who recruited investors have come under intense scrutiny by the FBI, regulators and a court-appointed trustee overseeing the liquidation of Madoff's assets.
The trustee and prosecutors have sought to go after assets to compensate thousands of burned victims who have filed claims against Madoff. How much is available to pay them remains unknown, though it's expected to be only a fraction of the astronomical losses associated with the fraud.
Sharon Lissaur is getting a chance to do something most of Bernard Madoff's 8,000 victims can't; she is one of the few selected to speak at the swindler's sentencing tomorrow.
Lissaur told CBS News.
The $171 billion forfeiture figure used by prosecutors merely mirrors the amount they estimate that, over decades, "flowed into the principal account to perpetrate the Ponzi scheme." The statements sent to investors showing their accounts were worth as much as $65 billion were fiction.
The investigation has found that in reality, Madoff never made any investments, instead using the money from new investors to pay returns to existing clients - and to finance a lavish lifestyle for his family.
In bankruptcy filings, Trustee Irving Picard say family members "used customers accounts as though they were their own," putting Madoff's maid, boat captain and house-sitter in Florida on the company payroll and paying nearly $1 million in fees at high-end golf clubs on Long Island and in Florida.
Picard has sought to reclaim ill-gotten gains by freezing Madoff's business bank accounts and selling legitimate portions of his firm. (Its season tickets for the Mets went for $38,100.) He's also sued big money managers and investors for billions of dollars, claiming they were Madoff cronies who also cashed in on the fraud.
The defendants include leading philanthropists Stanley Chais and Jeffry Picower - from whom Picard is seeking at least $5.1 billion alleged to have come out of victims' pockets - and hedge fund manager J. Ezra Merkin. All have denied any wrongdoing.
In other Madoff developments:
Tune in for CBS News' coverage of the Madoff sentencing starting around 10:00 a.m. ET.