Despite Madoff Guilty Plea, Questions Swirl and Rage Boils
Friday, March 13, 2009
NEW YORK, March 12 -- Some of Bernard L. Madoff's victims came to Lower Manhattan on Thursday to catch a glimpse of the man who had taken away their life savings, robbing them of their kids' college funds and of their pride.
On a clear but bitterly cold morning outside U.S. District Court, they wanted more answers about how the massive Ponzi scheme was perpetrated, who was involved and what was left. They wanted to tell the judge he should show no mercy. They wanted to vent their rage.
"To see him for the first time, I'm just very emotional and close to falling apart," Sharon Lissauer said as she stood in the chill, biting back tears. "I lost all my savings. I don't have anything else. If only he could reveal where [the assets] are and help make the investors whole."
As television helicopters circled overhead and hundreds of cameramen and photographers from around the world crowded around, Madoff walked briskly into the courthouse. He would not reemerge. He pleaded guilty to 11 felony charges, including securities fraud, mail fraud and money laundering. At 11:13 a.m., a little more than an hour after the proceedings began, an expressionless Madoff was led away to jail.
Madoff and his once-exclusive investment club were in many ways emblematic of the get-rich-quick ethos that defined the last decade and a half of a stratospheric stock market and booming home values. And while the number of victims may be relatively small -- several thousand, plus pension funds and charities -- Madoff's exposure as a fraud, and the audacity of his $65 billion scam, has equally come to define a nationwide economic meltdown that has seen some venerable investment firms shuttered and once-prominent banks hobbled.
If the nation's current economic crisis needed a face, Madoff supplied it. And if average citizens watching their 401(k)s sink needed to see a Wall Street villain hauled off in handcuffs, Madoff on Thursday supplied that, too.
Standing before a packed courtroom in a charcoal gray suit, Madoff, 70, said that he was "deeply sorry and ashamed" for what he had done. In a prepared statement lasting about 10 minutes, he said he was driven by a desire to meet clients' expectations of above-market returns "at any cost."
Madoff had told his clients he was using what he called a "split-strike conversion strategy," timing the purchase and sale of stocks to garner the remarkable returns that investors believed were flowing from his Midtown Manhattan offices. The account statements he issued were false. Some other financial institutions confided to investors that his approach made no sense. But as long as the returns kept coming, his marks suspended their disbelief.
"As I engaged in my fraud, I knew what I was doing was wrong, indeed criminal," Madoff told the court. "When I began the Ponzi scheme, I believed it would end shortly and I would be able to extricate myself and my clients from the scheme. However, this proved difficult, and ultimately impossible, and as the years went by, I realized that my arrest and this day would inevitably come."
After U.S. District Judge Denny Chin accepted the guilty plea, Madoff's attorney, Ira Sorkin, argued that his client should be allowed to await his sentencing in his Upper East Side penthouse. Chin refused, saying Madoff posed a flight risk, and ordered him jailed immediately. Chin set the sentencing for June 16.
"I don't need to hear from the government," Chin said, referring to prosecutors. "It is my intention to remand Mr. Madoff."
With that, some members of the audience erupted into applause.