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Madoff will await sentencing in jail
Request denied that swindler be allowed to return to his swank apartment
A federal appeals court ruled Friday that 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 issued its written ruling a day after hearing arguments from the government and a lawyer for the 70-year-old former Nasdaq chairman.
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.
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 also 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."
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.
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.
Request denied that swindler be allowed to return to his swank apartment
A federal appeals court ruled Friday that 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 issued its written ruling a day after hearing arguments from the government and a lawyer for the 70-year-old former Nasdaq chairman.
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.
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 also 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."
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.
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.
There was an unmistakable air of wealth in the room at last Wednesday's town hall for Bernie Madoff's victims, hosted by accounting firm Holtz, Rubinstein, Reminick in New York. Part of it was the setting, the luxurious Jumeirah Essex House hotel, part of it was the well-groomed hair, the elegant clothes, and the easily spotted facelifts among the mostly elderly crowd. But mostly it was that familiar sense of entitlement that came through in everything from the attendees' dignified rage to the substance of their questions, many of which were variations on "Who can we blame for this?" Which, of course, really meant "Who can we sue?"
"SIPC has generally been very tight with their money," Colombo said, adding that it might be a "tough call" whether the organization decided in his wife's favor.
SIPC is one avenue for retrieving funds lost to Madoff, but with a maximum of $500,000 available per investor, many victims are looking toward lawsuits, where higher payouts might be possible. Attendees were disappointed to hear the experts shoot down nearly all of their suggestions for potential legal action at the town hall—ideas like suing the SEC for negligence, suing J.P. Morgan on money-laundering charges, or even suing the IRS for failing to investigate their own now-inaccurate tax returns.
"We're trying every avenue we can, you know?" one questioner said, throwing his arms up in exasperation after being told that a potential suit against banks who handled Madoff's money was unlikely to succeed. "It's frustrating as hell."
One might expect that such a gathering would be all pathos and solidarity, with victims affected by the fraud seeking comfort in their common experience. There were moments where one felt—well, not quite empathy, but at least the room's unified rage. For example, attendees shouted approval at questioners who bashed the SEC for bungling their investigation. But overall, this meeting was strictly business, not therapy. Few, if any, questioners expressed sympathy for the others' stories, with most keeping a laser-like focus on their own personal emergencies as they tried to figure out how to report their losses in their tax filings, whether they should sue their financial adviser, and if they have any hope of receiving money if a political solution is reached in Washington regarding the Madoff case.
Part of this individualist attitude stems from the cold reality of the recovery process: Every victim is now as much each other's enemy as they are their counterpart. Madoff's fully liquidated assets are believed to total less than $1 billion, a small fraction of his firm's losses. The real money is almost entirely in the hands of the victims themselves, making for a Lord of the Flies of the wealthy and well-connected, one that was on full display at Essex House on Wednesday.
As horrifying as the idea might sound, nonprofits and elderly victims are as likely to be compelled to return Madoff funds as anyone else, according to experts.
There were the exceptions. The poor middle-aged man at the meeting on behalf of his wife, for example, whose employer had somehow been among the few unlucky companies whose 401(k) plans were handled with Madoff. Because they had a pooled fund instead of individual accounts, the employees there feared that the Securities Investor Protection Corporation—which doles out payments of up to $500,000 to victims of fraud—would only give them one payout instead of the 100 needed to cover all the affected staff. The answer from the panel's legal expert, Professor Ronald Colombo of Hofstra University, was not entirely encouraging."SIPC has generally been very tight with their money," Colombo said, adding that it might be a "tough call" whether the organization decided in his wife's favor.
SIPC is one avenue for retrieving funds lost to Madoff, but with a maximum of $500,000 available per investor, many victims are looking toward lawsuits, where higher payouts might be possible. Attendees were disappointed to hear the experts shoot down nearly all of their suggestions for potential legal action at the town hall—ideas like suing the SEC for negligence, suing J.P. Morgan on money-laundering charges, or even suing the IRS for failing to investigate their own now-inaccurate tax returns.
"We're trying every avenue we can, you know?" one questioner said, throwing his arms up in exasperation after being told that a potential suit against banks who handled Madoff's money was unlikely to succeed. "It's frustrating as hell."
One might expect that such a gathering would be all pathos and solidarity, with victims affected by the fraud seeking comfort in their common experience. There were moments where one felt—well, not quite empathy, but at least the room's unified rage. For example, attendees shouted approval at questioners who bashed the SEC for bungling their investigation. But overall, this meeting was strictly business, not therapy. Few, if any, questioners expressed sympathy for the others' stories, with most keeping a laser-like focus on their own personal emergencies as they tried to figure out how to report their losses in their tax filings, whether they should sue their financial adviser, and if they have any hope of receiving money if a political solution is reached in Washington regarding the Madoff case.
Part of this individualist attitude stems from the cold reality of the recovery process: Every victim is now as much each other's enemy as they are their counterpart. Madoff's fully liquidated assets are believed to total less than $1 billion, a small fraction of his firm's losses. The real money is almost entirely in the hands of the victims themselves, making for a Lord of the Flies of the wealthy and well-connected, one that was on full display at Essex House on Wednesday.
