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Madoff pleads guilty as prosecutors seek to recover $177 billion

Video by Christopher MOORE

Latest update : 2009-03-13

Disgraced Wall Street financier Bernard Madoff pleaded guilty to 11 counts of fraud, money laundering and theft on Wednesday. Prosecutors say they are seeking to recover the estimated $177 billion Madoff lost for his investors.

AFP - Disgraced Wall Street investment guru Bernard Madoff Thursday apologized for swindling thousands of clients of billions of dollars in one of the largest financial scams in history.
   
"How do you plead?" Judge Denny Chin asked Madoff, as he appeared in the dock in a packed New York courtroom wearing a grey suit, dark tie and white suit.
   
"Guilty," Madoff replied, admitting all 11 counts of fraud, money laundering and theft which prosecutors say amounts to a whopping 177 billion dollars.
   

Speaking publicly for the first time about the scheme, Madoff, 70, who now faces a possible prison sentence of 150 years, said he was "deeply sorry and ashamed."
   
"I believed it would end quickly and I would extricate myself and my clients," he said. "This proved difficult and, in the end, impossible."
   
"I cannot adequately express how sorry I am," he added, saying: "I am here today to accept responsibility for my crimes."
   
Prosecutors have said they are also seeking to recover 177 billion dollars that Madoff is alleged to have received from clients over two decades, some of which he then paid out to other clients to create the illusion of high investment returns.
   
Chin has said he would decide Thursday whether to lock up Madoff -- currently on bail and living in his luxury New York apartment -- while the disgraced financier awaits sentencing.
   
Adding to the drama, some of the thousands of people believed to have been swindled in the massive fraud will be allowed to speak.
   
One of Madoff's alleged victims was Bennett Goldworth, who said he invested nearly four million dollars -- 97 percent of his net worth -- with the financier.
   
The loss "turned my life inside out, upside down," Goldworth told CNN on Thursday. "I was retired. I'd moved to Florida. I was starting over. And now I've had to move back to New York, move in with a parent at 52 years old. Start over with my business, which I had retired from."
   
Goldworth believes that the government has done little for the Madoff victims. "We've been stripped of everything. This is like any other emergency that's occurred in our country ... I don't have next month's rent," he said.
   
"And there are many victims who are older than I am who can't start over, who can't work, and they have nothing," he told CNN.
   
Chin said victims can comment on whether or not the court should accept Madoff's plea and on whether he should remain on bail.
   
Other issues, such as what punishment Madoff might deserve, will be off limits.
   
But Madoff's downfall signals only the start of attempts to seize the money he took.
   
Prosecutors in court filings Tuesday argued that Madoff should forfeit a staggering 177 billion dollars tied to his fund -- which stole clients' money from around the world over more than two decades.
   
Madoff's defense lawyer Daniel Horowitz rejected the 177 billion figure as "grossly overstated -- and misleading -- even for a case of this magnitude."
   
The dispute underlines the difficulty that investigators face in unraveling who was a victim.
   
Madoff was charged with running a giant pyramid scheme that used new investors' capital to pay profits to existing clients.
   
But while he is said to have enriched himself and those close to him, Madoff was at the same time using those stolen funds to pay steady returns to clients for many years.
   
When clients demanded their capital back, Madoff always obliged -- at least until redemption requests accelerated last year during the Wall Street meltdown and the scheme collapsed.
   
Horowitz pointed out that the charges stated Madoff used "most" of his funds to meet such redemption requests. "That distinction is of vital importance," Horowitz said.
   
No one else has been charged, though prosecutors say the case remains open.
   
Legal experts say the probe might turn to others, including Madoff's brother Peter, and his sons Mark and Andrew, all of whom worked closely with the disgraced investment manager.
   
Madoff's wife Ruth is about to get her own lawyer, having previously relied on Sorkin.
 

Date created : 2009-03-12

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