An "extraordinarily evil" fraud that took a "staggering toll" on its victims... that's what the judge said when he sentenced Bernard Madoff, age 71, to the statutory maximum, 150 years in prison for running a Ponzi scheme estimated at $65 billion. No parole is available. For good behavior, he could get 15 percent of the time knocked off, leaving him 127 years to serve.
When federal Judge Denny Chinn handed down the verdict on June 29th, the courtroom erupted in applause.
Just six months earlier in December 2008, Madoff confessed to his sons that his entire money management business was one giant Ponzi scheme, that he had been running for at least 20 years. One day later, on December 11th, he was arrested.
Madoff appeared in court alone, without the support of family or friends. Unlike other well-publicized financial crimes cases, nobody came forward to give character references for him. He sat in court, with his back to his victims, his hands pressed firmly on the table. However, at one point he did turn and briefly address his victims.
"I'm sorry. I know this doesn't help you. I will live with this pain, with this torment, for the rest of my life. I cannot offer you an excuse for my behavior. How do you excuse betraying thousands of investors who entrusted me with their life savings? How do you excuse deceiving 200 employees who spent most of their working life with me? How do you excuse lying to a brother and two sons who spent their entire lives helping to build a successful business? How do you excuse lying to a wife who stood by you for 50 years?"
Madoff continues to try to insulate his family from responsibility for his crimes, telling investigators that he lied to them. Members of the Madoff family are still working for the company, though they remain under federal scrutiny.
After Madoff was sentenced, his wife, Ruth Madoff made a statement of her own.
"Like everyone else, I feel betrayed and confused. The man who committed this horrible fraud is not the man whom I have known for all these years."
While some may sympathize with Mrs. Madoff, reports that she has been "reduced" to living on $2.5 million have many of her husband's victims crying foul.
Over 100 of Madoff's victims sent letters to Judge Chin, referring to Madoff as a "monster" and "low life." Nine victims were in court to hear the sentencing. One said the money Madoff's scheme stole from him had been set aside for the care of a mentally disabled brother. Another said that she has been reduced to recycling bottles and cans and digging through dumpsters. A widow described how, two weeks after her husband died, she went to see Madoff who put his arm around her and assured her, "your money is safe with me."
Madoff's attorney, Ira Sorkin had asked Judge Chin to apply a sentence of 12 years, based on Madoff's age and because, Sorkin said, his client had assisted federal prosecutors in the investigation. Chin disagreed with the assertion that Madoff had been helpful, saying in a statement, "I don't get a sense that Mr. Madoff has done all he could, or told all that he knows."
Federal prosecutors asked for the statutory maximum, 150 years, and that's what they got, in what The Wall Street Journal refers to as a "landmark sentence." A former federal prosecutor speculated that the judge was trying to underscore the severity of Madoff's actions by sending down a sentence that can't possibly be served in Madoff's lifetime. The prosecutor called the sentence "a powerful deterrent," adding that regardless of age, a crime of this magnitude can result in a life sentence.
It isn't yet known whether Sorkin will appeal, since the verdict was within federal guidelines. Sorkin called his client a "deeply flawed individual." But he added that the $13 billion government prosecutors say he lost is an overblown figure. The recovered assets, said Sorkin, which have been returned to investors, will be shown to be worth much more than the estimated billion dollars. But Judge Chin dismissed that as irrelevant to the sentence.
As yet, it is unknown where Madoff will serve his time. Sorkin has asked for a medium security facility in Otisville, New York.
Some industry experts predict that Madoff's actions have deeply affected the future of the money management business. Many investors are turning to more passive strategies like index funds where there is less room for individual direction.
Just one day after Madoff was sentenced, media attention turned to the people who still work for the company, asking who helped him pull off a two-decade long swindle. Though Madoff has taken full responsibility for the scheme, onlookers are doubtful that he could have acted alone. Madoff will undoubtedly die in prison, but if the media and the public have their way, there could still be a Chapter Two coming.