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Madoff: "I Knew What I Was Doing Was Wrong, Indeed Criminal"
By
Jen Chung
Published Mar 12, 2009
Modified Mar 12, 2009
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By
Jen Chung
Published Mar 12, 2009
Modified Mar 12, 2009
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Earlier today, Bernard Madoff pleaded guilty to eleven criminal charges related to the Ponzi scheme that ensnared thousands of individuals, charities and banks and involves tens of billions in losses. U.S. District Judge Denny Chin revoked Madoff's bail and ordered that he be jailed until his sentencing, which is scheduled for June 16.
Madoff read a statement (you can read his plea allocution here) admitting to operating a huge Ponzi scheme, claiming his relatives and employees had no idea it was going on, and explaining how he duped so many.
The essence of my scheme was that I represented to clients and prospective clients who wished to open investment advisory and individual trading accounts with me that I would invest their money in shares of common stock, options and other securities of large well-known corporations, and upon request, would return to them their profits and principal. Those representations were false because for many years up and until I was arrested on December 11, 2008, I never invested those funds in the securities, as I had promised. Instead, those funds were deposited in a bank account at Chase Manhattan Bank. When clients wished to receive the profits they believed they had earned with me or to redeem their principal, I used the money in the Chase Manhattan bank account that belonged to them or other clients to pay the requested funds...
Among other means, I obtained their funds through interstate wire transfers they sent from financial institutions located outside New York State to the bank account of my investment advisory business, located here in Manhattan, New York and through mailings delivered by the United States Postal Service and private interstate carriers to my firm here in Manhattan.
While Madoff's admission of guilt closes one chapter, there are still many unanswered questions. For instance, the Wall Street Journal reports, "Mr. Madoff said he started the scheme in the 1990s during a recession, which was difficult for investing in stocks. That is at odds with prosecutors, who allege that the scheme began as early as the early 1980s. Investigators have found evidence of fraud even earlier than that."
While Madoff is being held at the Metropolitan Correctional Center downtown, the new guessing game is where he'll serve out his lengthy sentence. One option is the Otisville Correctional Facility in Mount Hope, NY. According to a defense attorney who spoke to Esquire, "Otisville is home to about 1,100 prisoners, many of whom are convicted of violent crimes like murder, rape, and assault... 'There are a million psycho federal inmates in custody who would love to say that they stabbed Bernie Madoff,' he says."
The U.S. Attorney's office may bring more charges against him—and other. Acting U.S. Attorney Lev Dassin said, "We are continuing to investigate the fraud and will bring additional charges against anyone, including Mr. Madoff, as warranted."
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Bernard Madoff
courthouse
ponzi scheme
Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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