Bernie Madoff's Brother Agrees to Guilty Plea and Ten Year Sentence

Peter Madoff will plead guilty Friday in federal court to charges based on his role as a compliance officer for Bernie Madoff's firm. While the charges will include "falsifying documents, lying to regulators and filing false tax returns", the Times says he is essentially agreeing he was an "enabler."

Peter Madoff has agreed to a prison term of 10 years, prosecutors said in a letter filed with the court on Wednesday. As part of his plea deal, he has agreed to forfeit $143 billion, a staggering penalty that he is not likely to be able to pay.

...The guilty plea does not amount to an admission that Peter Madoff knew about or participated in his brother’s Ponzi scheme. Rather, it confirms the government’s allegations that Peter Madoff served as a sham compliance officer who exercised little if any legal oversight over the firm’s operations, effectively enabling his brother’s crimes.

The Trustee in the Madoff case says he will be distributing more than $8 billion to victims this week, bringing the total distributed to $9 billion, out of $18 billion sought to be recovered.

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    I heard last year (none / 0) (#1)
    by desmoinesdem on Thu Jun 28, 2012 at 12:17:53 AM EST
    that law enforcement were going after some of the "rank and file" Madoff investors (who lost everything they had invested with him), on the grounds that even though they didn't know about the scam, they inadvertently benefited from his criminal activity over the years when they were withdrawing money out of their accounts, seeing the asset levels go up.

    I heard this third-hand from someone whose family friend was supposedly caught up in the mess. Got in early with Madoff, thought he was smart to have most of his life savings invested with Madoff while other people took risks with accounts that didn't automatically go up every year. Now he's in his 70s, and not only does he have no savings and no time to work/save for retirement, he has to worry about being ordered to pay money back because he supposedly benefited from Madoff's fraud over a period of many years.

    Anyone know if this kind of thing is happening to lower-level Madoff investors?

    Those are the "clawback" lawsuits (none / 0) (#2)
    by jbindc on Thu Jun 28, 2012 at 07:49:50 AM EST
    The Liquidator of Madoff's assets, Irving Picard, is trying to "clawback"

    The defendants, of course, are arguing that Picard is barred by state and federal laws from clawing back the funds invested with a brokerage.

    Rakoff (the judge in this lawsuit) previously told the defendants not to repeat any arguments he had made and decided in an earlier case dealing with brokerage customers' rights, involving investor James Greiff. Rakoff ruled in that case that a brokerage customer's account statements don't protect against all clawbacks. The judge also said that Picard can only recoup two years of fake profits, not the six years he sought.

    Rakoff's takeover of hundreds of Picard lawsuits demanding billions of dollars has undercut U.S. Bankruptcy Judge Burton Lifland's power to reverse some fraudulent transfers and limited Picard's ability to collect money to pay investors in Madoff's $57 billion Ponzi scheme, the largest in U.S. history. Rakoff and U.S. District Judge Colleen McMahon together knocked out $90 billion of Picard's claims against banks including JPMorgan Chase & Co. and HSBC Holdings Plc. (HSBA)

    Picard has filed more than 1,000 lawsuits while charging $273 million for his firm's Madoff work. Madoff is serving a 150-year prison sentence.