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There will be no plea agreement for notorious New York Ponzi schemer Bernard Madoff, a prosecutor said in Manhattan court this afternoon. Because of certain procedures last week, skeptics worried that Madoff, who has confessed to running a $50 billion Ponzi scheme, would cop a plea and get off light. But he is expected to plead guilty later this week. He is charged with 11 felonies, including securities, investment advisory, mail, and wire fraud; three counts of money laundering; false statements; perjury; false filings to the Securities and Exchange Commission, and theft from an employee benefit plan. He could get more than 100 years. At age 70, he is likely to spend the rest of his life behind bars. He solicited billions of dollars from investors since at least the 1980s, but most of the money went out the door to meet investors' requests. Prosecutors said he hired dozens of employees with little no experience in finance to generate false trading records and monthly statements. Some investors were promised annual returns as high as 46 percent. He is charged with transferring $250 million of clients' money to the firm's supposedly-independent market-making business, run by his two sons on another floor of the building occupied by the firm. On Nov. 30, Madoff reported having 4,800 clients with $64.8 billion under management. But in fact, he "only held a small fraction of that on behalf of his clients," says the government. In September, Madoff got $10 million from 35 labor unions and "converted those funds to his use and the use of others," according to the government.

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Comments

JustWondering March 11, 2009 @ 3:10 p.m.

I'm just wondering if the term Ponzi will be replaced by MADE-OFF with Billions....

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Don Bauder March 11, 2009 @ 4 p.m.

Response to post #13: Madoff is indeed a descriptive word. Best, Don Bauder

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Don Bauder March 12, 2009 @ 10:41 p.m.

Response to post #25: Amen. Best, Don Bauder

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valueinvestingisdead March 10, 2009 @ 6:31 p.m.

Wow, I wonder what job his wife Ruth had to accumulate a $7 million condo, $50 million in bonds and $20 million in cash? Can;t be tied to the Ponzi. She must have been one heck of a hard worker. Does anyone with a brain believe this non-sense? They both should be hung in Times Square.

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SurfPuppy619 March 10, 2009 @ 6:51 p.m.

Madoff should be taken out and shot.

I am serious.

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Don Bauder March 10, 2009 @ 7:42 p.m.

Response to post #1: One reason judges stall out administering justice (in this case, life in prison) is they want the people to forget the whole thing so the villain can get off easy. But I don't think the public will forget this one. Madoff has become the embodiment of the excesses, greed and deceit that got us into this mess. Best, Don Bauder

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Don Bauder March 10, 2009 @ 7:44 p.m.

Response to post #2: If Madoff's wife gets away with the claim of all those millions belonging to her, the public should march on the courthouse in New York. Best, Don Bauder

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Don Bauder March 10, 2009 @ 7:46 p.m.

Second response to post #2: You want Bernie Madoff hung in Times Square. I think you meant "hanged," not "hung." But if you meant the latter, this case has taken an unusual turn. Best, Don Bauder

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Twister March 11, 2009 @ 9 p.m.

Response to comment #12:

I believe that is Wiggly Field . . .

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Don Bauder March 10, 2009 @ 7:48 p.m.

Response to post #3: Being shot would be more merciful than being hanged. But Bernie being hung would constitute a bizarre end to a bizarre tale. Best, Don Bauder

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Don Bauder March 10, 2009 @ 7:52 p.m.

Response to post #4: With luck, Madoff will be in prison this week. Best, Don Bauder

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Don Bauder March 11, 2009 @ 3:58 p.m.

Response to post #13: I listened to Markopolos's testimony to Congress. Unfortunately, he kept saying that the SEC is "incompetent." In fact, the SEC is "corrupt." Best, Don Bauder

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Time_on_my_hands March 10, 2009 @ 5:07 p.m.

Anything near a proper application of the Sentencing Guidelines should result in the equivalent of a life sentence for a man of Bernie's age. I wonder how much time the judge will allow him to remain free on bail prior to self-surrender or remand to custody. Thus far, his attorney has succeeded in delaying the inevitable. Despite the lack of a plea agreement, future cooperation might prompt a petition for a reduction in sentence from the government. However, that would have to be extraordinary "substantial assistance" and it would be poorly received by the public (and hopefully the judge).

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SurfPuppy619 March 10, 2009 @ 6:56 p.m.

Anything near a proper application of the Sentencing Guidelines should result in the equivalent of a life sentence for a man of Bernie's age. I wonder how much time the judge will allow him to remain free on bail prior to self-surrender or remand to custody.

In 99.9999999% of criminal cases where a plea is entered the cuffs go on right then and there.

Sometimes the judge will allow a person to stay out on bail if there is an appeal and the person is connected in some manner (like our 3 local judges who were convicted 15 years ago). I doubt will happen here because of the unconditional plea.

The problem with this case is the judge allowed this clown out on "house arrest" instead of keeping him locked up so far-so all bets are off as to when this slimeball actually starts serving time.

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Time_on_my_hands March 11, 2009 @ 9 a.m.

"Madoff has become the embodiment of the excesses, greed and deceit that got us into this mess."

Don, looks like Charles Ponzi will be dethroned as the king of fraud. While hardly anyone knows what Ponzi looks like, Bernie's face will be etched into our memories for years to come. I, too, think the judge will remand him once the plea is taken. If not, a public uproar would be appropriate and widely heard.

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Don Bauder March 11, 2009 @ 9:22 a.m.

Response to post #10: I hope we get into the details of this. Some frauds become Ponzi schemes after a company unravels. Gary Naiman's hard money real estate scheme had come apart before he made it into a Ponzi to keep it going. Jerry Dominelli's scam was a Ponzi from the outset; he did very little actual investing. This appears to be what Madoff's was. The government says he did very little buying and selling. He must have thought he could make a Ponzi scheme work. Maybe he had a new theory of how it could be pulled off. He obviously had colossal hubris: here he was reporting big, regular gains even in down markets, and he seemed to think nobody would get suspicious. He probably had a law firm that had the SEC wrapped around its fingers. That hasn't come out yet. The government will try to bury that, if that's what happened. Nobody except a few journalists such as myself and ex-SEC employees such as Gary Aguirre wants the public to learn how law firms control the SEC by hiring lawyers from its staff -- the so-called revolving door phenomenon. Best, Don Bauder

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SurfPuppy619 March 11, 2009 @ 11:10 a.m.

The government says he did very little buying and selling. He must have thought he could make a Ponzi scheme work. Maybe he had a new theory of how it could be pulled off. He obviously had colossal hubris: here he was reporting big, regular gains even in down markets, and he seemed to think nobody would get suspicious. He probably had a law firm that had the SEC wrapped around its fingers. That hasn't come out yet. The government will try to bury that, if that's what happened.

On "60 Minutes" a week and a half ago they had a guy who thought Madoff had a ponzi scheme and he said it took him 4 hours using mathimatical models to KNOW Madoff had a ponzi scheme and he reported thsi to the SEC on multiple occassions, like 10 differetn times, but the SEC never investigated;

(CBS) It has been two and a half months since Bernard L. Madoff was picked up and charged with what is believed to be the largest financial fraud in history.

The one person who knows the most and is willing to talk about it is Harry Markopolos, the man who figured out Madoff's scheme before anyone else.

Until a few months ago, Harry Markopolos was an obscure financial analyst and mildly eccentric fraud investigator from Boston who most people would never notice on the street.

http://www.cbsnews.com/stories/2009/02/27/60minutes/main4833667.shtml

So the government obviously knew. This guy said the SEC couldn't find second base if they were behind home in Wrogley Field.

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Twister March 11, 2009 @ 8:56 p.m.

Not that I want to twist things around, but Madoff's biggest "crime" might have been not paying off the right people. In any case, I wonder how much of convenient distraction he is from the even larger issue of the trillions sucked out of the bottom by the top. Forbes Magazine actually is shedding tears for billionaires actually reduced by the same percentage as my losses from my tiny retirement fund. Bread and Circuses? At long last, at long last, is there no justice for the deprived filthy rich? We, the unwashed heathen are, after all, dependent upon the cake crumbs from their trash cans and sucking the last few drops from their Laffyite Rothaccount jugs--if we could only get the locks off their dumpsters and fend off their Rot whilers.

What about having the guy sleep outside and collect bottles and cans for a living? Or with a guy who is hung in the extremis, maybe he can star in a certain kind of film for the impotent or be used to prop up the ceiling of some strip-club stage in lieu of the more brassy kind?

I could go on, but my irony will is gone . . . I've got more errers to spread around.

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Don Bauder March 11, 2009 @ 10:35 p.m.

Response to post #16: You're on a roll, Twister. Instead of sleeping outside and collecting bottles and cans, he could spend the rest of his days sharing his prison cell with a real estate salesman or a Marine drill instructor. Best, Don Bauder

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concernedcitizen77 March 11, 2009 @ 11:33 p.m.

Don,

I read in a few different places, and you won't believe this, that Madoff's son in law worked as an inhouse attorney in the enforcement division of the SEC.

Also, Madoff was so much a part of the "Old Boy Network" and leadership of Wall Street that the SEC probably never took the reports of improprieties seriously or, more damaging, may have looked the other way (maybe some of Madoff's in house friends at SEC were benefitting financially from this 30 year setup/ Ponzi scheme).

Also, Madoff's lawyer invested and he was still defending him so maybe he got more than his moneys worth back?

Can't see how a NY Judge would let Madoff stay free in a multi million dollar penthouse apartment while this is sorted out---Crazy and shows that Justice system may be corrupted too.

This case is starting to look and sound like an episode from "24".

I just do not see Jack Bauer around when you need him.

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Time_on_my_hands March 12, 2009 @ 4:52 a.m.

If the judge remands today, Bernie may want to move for a quicker sentencing date than originally expected. Local custody pending sentencing and then placement by the Bureau of Prisons will be far from "Club Fed." Here's an excellent article in Bloomberg today.

http://www.bloomberg.com/apps/news?pid=20601109&sid=asmcBPMTWqWI&refer=home

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Don Bauder March 12, 2009 @ 7:42 a.m.

Response to post #19: Yes, one who is close to Madoff, and I believe it is his son-in-law, worked for the SEC. Now to the SEC: I repeat that I am dismayed that people keep saying the SEC is incompetent. It is not incompetent. It is corrupt. Its original mission was to protect investors from Wall Street. Now its mission is to protect Wall Street from investors, and from the public. The agency was particularly corrupt during the recent reign of Christopher Cox, who as the Reader pointed out from the outset, should never have been appointed in the first place. Best, Don Bauder

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Don Bauder March 12, 2009 @ 7:45 a.m.

Response to post #20: Good Bloomberg article. Madoff will not be popular -- indeed, may not be safe in prison. Best, Don Bauder

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SurfPuppy619 March 12, 2009 @ 11:28 a.m.

Yes, corrupt is a better word than incompetent for the SEC-my bad.

Madoff was remanded to custody just a few minutes ago.

His days of ever being a free man are now over-I hope he never sees daylight again either. Solitary with artificial light.

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Don Bauder March 12, 2009 @ 1:47 p.m.

Response to post #23: I certainly hope the public doesn't forget him and the government feels it can let him go after a few years. Best, Don Bauder

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Duhbya March 12, 2009 @ 2:53 p.m.

And let us hope that this is just the first administering of justice due many of the current spate of greedmongers.

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Josh Board March 14, 2009 @ 3:35 p.m.

I just heard that Ruth might be able to keep some assets in Florida (the way OJ did). She should lose everything, unless she can prove she had a job making enough to pay for those items.

And, is it me, but I felt a little less bad about a few of the people that said they invested with him because they, too, were Jewish. And that's why they trusted him. Well, you're an idiot then. Just like my grandmother, a sweet little Jewish lady, who claimed Larry King did amazing interviews. When I kept pushing her as to why she felt that way, she blurted out "he was a nice Jewish boy from Florida!!!!!"

Why does it take someone like Jon Stewart going on and on about how you don't make money by investing with people that assure you you'll get 20% interest on it, without wondering how that's possible. Really? Do we need to be given the ol' "to good to be true, it probably is," from comedians? Is society so dumb they can't figure these things out?

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Don Bauder March 14, 2009 @ 4:22 p.m.

Response to post #27: I haven't heard that, but it's logical. Florida allows a bankrupt person to keep assets if they are invested in a home. So a crook builds a $45 million home in Florida, as O.J. did. If there were any justice, Ruth wouldn't be allowed to keep anything. Her claim that her money was her own is nonsense. The government should ruthlessly (no pun intended) root out all her assets, determining the source of them. They should be distributed to victims. Possibly the Florida law can be circumnavigated in some way. Best, Don Bauder

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SurfPuppy619 March 17, 2009 @ 11:37 a.m.

I just heard that Ruth might be able to keep some assets in Florida (the way OJ did).

OJ was able to sheild lawfully earned money from a civil judgment based on the state of FL $1 million homeowners excemption.

But Madoff's assets were from fraud-those won't get shielded anyway you slice it.

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Don Bauder March 17, 2009 @ 1:45 p.m.

Response to post #29: Yeah, but I have seen some characters who pulled blatant frauds taking advantage of the FL homeowners exemption. Best, Don Bauder

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