Court: Madoff's brother to plead guilty in New YorkNEW YORK (AP) — The brother of Ponzi scheme king Bernard Madoff will plead guilty on Friday to conspiracy and falsifying records, admitting his role in the multibillion-dollar fraud that destroyed the savings of thousands of investors, prosecutors told a judge on Wednesday.
By: Associated Press , The Jamestown Sun
NEW YORK (AP) — The brother of Ponzi scheme king Bernard Madoff will plead guilty on Friday to conspiracy and falsifying records, admitting his role in the multibillion-dollar fraud that destroyed the savings of thousands of investors, prosecutors told a judge on Wednesday.
Peter Madoff is the former chief compliance officer at the private investment arm of Bernard Madoff's business.
Court papers signed by a federal judge in Manhattan on Wednesday show Peter Madoff, who had worked with his brother since 1965, will plead guilty to two criminal counts, admitting his role in a conspiracy to commit securities fraud, falsify records of an investment adviser, falsify records of a broker dealer, make false filings with the Securities and Exchange Commission, commit mail fraud and obstruct the Internal Revenue service.
Assistant U.S. Attorney Lisa A. Baroni wrote in a letter to U.S. District Judge Laura Taylor Swain that, pursuant to a plea agreement with the government, Madoff had agreed “not to seek a sentence other than 10 years’ imprisonment.”
Madoff also agreed to the criminal forfeiture of $143 billion, including all of his real estate and personal property. The $143 billion, representing the amount of money believed to have flowed through the business accounts during the multi-decade Ponzi scheme, is included in the criminal forfeiture agreement, though authorities know that Peter Madoff's assets would never approach that figure.
Madoff's attorney didn't immediately return an email seeking comment on Wednesday.
Bernard Madoff, 74, is serving a 150-year prison sentence in Butner, N.C., after revealing in December 2008 that he cheated thousands of investors of roughly $20 billion for years, using money from new investors to pay returns to existing clients.
Lawyers for a court-appointed trustee recovering money for Bernard Madoff's investors had said Peter Madoff also was the company's senior managing director.
The trustee, Irving Picard, said in court papers that Peter Madoff “failed miserably” to meet his responsibilities to monitor the company's operations and ensure its compliance with federal securities laws.
The court papers said Peter Madoff had received at least $60 million during the fraud and used fake stock trades to make large withdrawals seem justified.
Picard sought nearly $200 million from Madoff family members, claiming they used Bernard L. Madoff Investment Securities LLC as “the family piggy bank” to pay for vacation homes, cars, boats and even a stake in a beauty parlor.
Picard's pending lawsuit alleges that over the years Peter Madoff, his daughter and his nephews “withdrew millions more than they invested” in private investment accounts they had with the firm.
Peter Madoff “ignored obvious red flags that the profits reflected in account statements could not have been earned legitimately, to the detriment of BLMIS and its other customers,” the lawsuit says.
Bernard Madoff's relatives have said they did not know about his Ponzi scheme.
The massive scheme, run since at least the early 1990s, demolished the life savings of thousands of people, wrecked charities and shook confidence in the U.S. financial system. When Bernard Madoff pleaded guilty, he insisted that he acted alone, describing a separate wholesale stock-trading firm run by his sons and brother as honest and legitimate.