Madoff awaits his fate

Madoff could serve up to 150 years in prison for robbing clients, though his lawyer has asked the judge for a 12- to 20-year sentence [AFP]

Wall Street’s biggest swindler, Bernie Madoff, will be sentenced on Monday, 29th of June, by a New York-based federal judge.
 
The one-time investment guru has pleaded guilty to running a Ponzi or criminal investment scheme and robbing clients of $65bn.
 
He could serve up to 150 years in prison but Madoff’s lawyer has asked the judge for a 12- to 20-year sentence.
 
But many of his victims will be in court to watch as sentenced is passed and they are hoping for the maximum 150 years behind bars.
 
On Thursday, I joined two of Bernie Madoff’s more than 13,000 individual victims in a Manhattan apartment as they surfed the web in search of headlines about the man who ruined their retirement years.

‘Very lonely’
 
“He’s going to be very lonely they say, isn’t that awful.”

That’s Budd Baker who along with his wife Judith Welling thought their retirement was set until Madoff robbed them of two and a half million dollars – and their peace of mind.
 
They first heard he had been arrested during a family dinner last December.

Judith told me: “There we were drinking it up, eating it up, having a lovely time – to have it all come crashing down. At first we just couldn’t believe it. We absolutely were in shock.”
 
Judith and Budd had planned to withdraw a million dollars last December just before Madoff’s arrest to help fund their grandchildren’s’ education and support several charities in New York … but they missed the deadline and now their savings are gone.
 
“This is a man with no conscience, obviously we did not know him we had never met him, never spoken to him but watching what has happened and what he did to so many people,” Judith said.

Ponzi scheme

The 71-year-old Bernie Madoff was seen as an investment guru.  He ran a Ponzi or criminal investment scheme.

Promising investors an above-market rate of return. Not outlandish but more than anyone else was offering.
 
Over 20 years people flocked to him: investing money with Madoff was considered a privilege.
 
But what Madoff was doing was taking money from the newest investors and using it to pay out existing clients.
 

In depth

Ralph Nader on Madoff  Madoff scheme hits charities  What is a Ponzi scheme?

Last year’s market crash and recession meant that the flow of new investors dried up. The game was up!
 
In December Madoff confessed to the FBI: billions of dollars of clients money was lost.
 
Madoff’s business was divided between two floors at New York’s famous Lipstick building on Third Avenue.

There was a normal investment firm overseen by his two sons Andrew and Mark, and a highly secretive one run only by Madoff and a handful of trusted staff.

With Madoff in jail, the police investigation has widened to include Madoff’s sons and his wife Ruth, who was given millions by her husband over the years.
 
Richard Parker, a professor at Harvard University, told me on a trip to Boston, Massachussetts, last week that proving the Madoff family knew what was going on will be tough.

“The barrier for the prosecutors is not simply to find that she [Ruth Madoff] received large quantities of income from his enterprises, but that she knew that what he was doing was illegal and continued to receive those funds,” he said.

How many more?
 
As the investigation into the biggest swindle in Wall Street history continues, many wonder how many more Madoffs have yet to come out of the woodwork.

Professor Parker is very clear on that: “I can assure you that more Madoffs are out there. They are turning up on a regular basis. We’ve had Sir Alan Stanford in the Caribbean. We’ve had people indicted in Europe. We’ve had people indicted in Long Island, Las Vegas … they’re gonna turn up all over the place.”

Back at the Manhattan apartment near Central Park, Budd was in no mood to pull any punches.

He told me that when Madoff was first charged, he found himself outside the courthouse in lower Manhattan just at the moment Madoff walked past on his way out of the building:

“I said I’d like to stone you to death and he heard me, but he didn’t even flinch. He just had that continual smirk and walked and got into his car and went home to the house he lived in with our money.”

Victims’ thoughts
 
I will be with Judith and Budd outside the courthouse in New York on Monday as Madoff’s sentence is handed down.

He is not expected to taste freedom ever again, though he could be sent to a “soft” institution for white-collar criminals.

But that’s not good enough for Judith and Budd. They want to see him do time with hardened criminals like murderers and rapists in a real jail like New York’s infamous Rikers Island.

Budd volunteered a thought: “How about keeping Guantanamo Bay open just for him?”

He was smiling as he said it but he wasn’t really joking.