NEW YORK -- In a courtroom surprise, lawyers revealed yesterday that Bernard Madoff will plead guilty tomorrow to securities fraud, perjury and other crimes, knowing that he could face up to 150 years in prison for one of the largest frauds in history.
The revelation came as prosecutors unveiled an 11-count charging document against the 70-year-old former Nasdaq chairman. His lawyer, Ira Sorkin, told a judge that Madoff planned to plead guilty this week without a plea deal.
The news came at a hearing that was supposed to center on Madoff's agreement to waive any potential conflicts of interest involving Sorkin, whose family had invested with Madoff.
Madoff has been under house arrest in his $7 million Manhattan penthouse since he was arrested in early December, after authorities said he confessed to his family that he had carried out a $50 billion fraud. So far, authorities have located about $1 billion for jilted investors.
Asked by U.S. District Judge Denny Chin if Madoff would plead guilty tomorrow, Sorkin said: "I think that's a fair expectation." Chin asked Sorkin if Madoff would plead guilty to all 11 counts. "Yes, Your Honor," Sorkin answered.
Assistant U.S. Attorney Marc Litt said there was no plea deal and that Madoff could be exposed to the maximum penalty under sentencing guidelines: 150 years.
Chin said he would not sentence Madoff for several months, and he would limit investors who want to speak at tomorrow's hearing to those challenging whether the plea should be accepted or whether Madoff should be allowed to remain on bail pending sentencing.
At least 25 Madoff investors have asked to speak tomorrow under provisions allowing victims of crime to appear at a plea hearing.
U.S. Attorney Lev L. Dassin said in a release that the filing of the charges do not end the matter. "Our investigation is continuing," he said.
Prosecutors say Madoff operated a massive Ponzi scheme in which his clients' funds were misappropriated and converted to the use of Madoff, his business and others.
In court documents, prosecutors revealed some details of how the fraud was carried out, saying Madoff hired numerous employees to serve as a "back office" for his investment advisory business. The government said many of the employees hired to perform those functions had little or no prior training or experience in the securities industry.
Prosecutors said Madoff caused those employees to, among other things, "communicate with clients and generate false and fraudulent documents including, but not limited to, monthly client account statements and trade confirmations that purportedly reflected the purchases and sales of securities that Madoff claimed had been conducted on behalf of [his] clients."
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