Bernard Madoff's brother gets 10-year sentence
Friday 21 Dec 2012 12:09 p.m.
Peter Madoff (Reuters)
By Larry Neumeister and Colleen Long
The brother of imprisoned financier Bernard Madoff was sentenced Thursday to 10 years in prison for crimes committed in the shadow of his notorious sibling.
Peter Madoff, 67, agreed to serve the time in prison when he pleaded guilty in June to conspiracy and falsifying the books and records of an investment adviser. About 40 of the thousands of investors who lost the $20 billion they invested in the family's private investment business wrote victim impact statements that were submitted to US District Judge Laura Taylor Swain.
Two spoke during the proceeding.
Peter Madoff told the court he was ashamed of his actions.
"I am deeply ashamed of my conduct and have tried to atone by pleading guilty and agreed to forfeit all of my present and future assets," he said.
In delivering the sentence, the judge said 10 years is "sufficient, appropriate and no greater than necessary."
The sentencing comes four years and a week after Bernard Madoff first revealed his epic fraud, which occurred over several decades as the former NASDAQ chairman built a reputation for delivering unparalleled investment results, even in bad times. The revelation came only days after the business sent out statements that made investors think their investments had grown to a total of more than $65 billion.
Peter Madoff said at his plea that he had no idea his brother was running a massive Ponzi scheme, paying off longtime investors at times with money from newer investors.
"My family was torn apart as a result of my brother's atrocious conduct," he said. "I was reviled by strangers as well as friends who assumed that I knew about the Ponzi scheme."
The judge said she did not believe Peter Madoff's claim that he knew nothing about his brother's fraud, calling it "frankly not believable," and urged him to tell the truth, even after sentencing.
But he conceded that he followed his brother's instructions and helped him decide which favoured friends, clients and family members would receive the $300 million that remained in the company's accounts. The checks were never sent.
Peter Madoff, who joined his brother's firm after graduating from Fordham Law School in 1970, has been free on $5 million bail after he agreed to surrender all of his assets.
Prior to sentencing, his lawyer, John Wing, said in a memorandum that Peter Madoff will "almost certainly live out his remaining days as a jobless pariah, in or out of prison." He called him a victim of his loyalty to his brother, saying he had been mistreated by the sibling who was eight years older and was viewed as "the prince" by his mother.
As part of a forfeiture agreement, Madoff's wife, Marion, and daughter Shana must forfeit nearly all of their assets. The government said those assets and assets that will be forfeited by other family members include several homes, a Ferrari and more than $10 million in cash and securities. It said his wife will be left with $771,733. Besides the Madoff brothers, no other family members have been arrested.
Though Madoff had been the firm's chief compliance officer for nearly four decades, the government marked his start in the conspiracy as 1996, when he created false and misleading compliance documents and false reports for the Securities and Exchange Commission.
The crime worsened after August 2006, when the business was registered with the SEC as an investment adviser, requiring annual filings to guide the SEC's examination programs. Prosecutors say Madoff made "numerous false statements" to create the false appearance that the business represented a small number of highly sophisticated clients.
Since the fraud was revealed, a court-appointed trustee has reached agreements to recover approximately $9.3 billion and is hoping to recover another $3 billion over the next 18 months. About $3 billion has been approved for redistribution to victims through an ongoing claims process.
Besides his 74-year-old brother, Peter Madoff is among six who have pleaded guilty in the case, including the former finance chief, a payroll manager, an accountant, a comptroller and a securities trader.
Five others face trial next year, including Bernard Madoff's longtime secretary. All have pleaded not guilty.