Lawyer: Madoff To Plead Guilty

Disgraced financier Bernard Madoff was in court Tuesday for a hearing on whether he is aware his lawyer has potential conflicts of interest. Madoff is expected to waive his right to a trial and plead guilty at a hearing Thursday.

MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

ROBERT SIEGEL, host:

And I'm Robert Siegel.

In New York today, prosecutors in the Bernard Madoff case indicated that they will charge Madoff with 11 separate felonies. Madoff is the disgraced money manager at the heart of an alleged Ponzi scheme. The charges he faces include securities and investment fraud, perjury, money laundering and theft. Madoff's lawyer said he expects his client to plead guilty on Thursday. Madoff could be sentenced up to 150 years.

NPR's Robert Smith was at the hearing today, and he joins us now from New York. Robert, this was supposed to be a procedural hearing, but they started talking about the expected guilty plea. Surprising?

ROBERT SMITH: Oh, it was a total surprise. We expected this hearing to be about a conflict of interest between Bernard Madoff and his lawyer, Ira Sorkin. And they did talk about that for 20, 30 minutes. And then the judge sort of transitioned over to another filing that happened this week, which was that Bernard Madoff indicated that he waived his right to a grand jury hearing.

Now, normally if you're going to fight a case, you want to go to a grand jury because it gives you another chance to present your case. And he said he waived his right to that, which meant he would be subjected to whatever the prosecutors decided to come up with in terms of charging him.

And the judge sort of turned to Bernard Madoff's lawyer and said, well, the expectation is that he will plead guilty on Thursday, is that right? And the lawyer seemed a little surprised and said, yes, that's the expectation.

SIEGEL: Now, there are 11 charges here. We can't go through all of them, but what's the most interesting to you?

SMITH: Well, you know, people have been waiting a long time. Maybe I should go through most of them here. There are four counts of fraud - securities, investment, mail and wire fraud. There's a false statements and perjury, we would expect those sort of things. Theft from an employee benefit fund and the original item he was charged with and held on house arrest on, which was false filing with the SEC.

The thing that interested me most was three counts of money laundering, which there had been questions about whether perhaps Bernard Madoff's fund was used for purposes other than just false investments, which is to launder criminal money. We don't have details of that allegation, but that certainly stood out.

SIEGEL: Now, the judge in this case, Judge Denny Chin, said that he's been getting a lot of letters from Madoff's victims. I gather he solicited those letters. And many of the people who were his - who were victims of Madoff were concerned that a plea agreement would let Bernie Madoff off with a life sentence, the light sentence, rather. Doesn't seem likely from what we're hearing today.

SMITH: No. But the judge had specifically, when he decided that there would be a hearing on a plea, whatever that plea may end up being on Thursday, he said that investors who want to be there and wanted to have their say in court could get their say on Thursday. And, in fact, federal prosecutors say they've received at least 25 email requests from investors who want to speak and dozens of other, sort of, opinions from investors.

But yes, the judge said that there was specific concern that Bernie Madoff would be let off easy because he made some sort of deal to give information or rat on his associates or something like that. But it was made very clear in court by prosecutors that, as of right now, there is no plea deal. If Bernard Madoff pleads guilty on Thursday, he will have to plead guilty to all 11 counts against him by federal prosecutors.

SIEGEL: And back to that, to the original business of this hearing, which you mentioned, which was the question, is there a conflict of interest for Madoff to be represented by his lawyer, IRA Sorkin, who also invested his family's money with Madoff. How was that resolved today?

SMITH: Well, it was resolved by Madoff standing up and saying, I understand that there is a conflict and it's not a problem with me. Now, remember the federal prosecutors weren't trying to throw out Madoff's lawyer. What they wanted Bernard Madoff to say, and he said it, is that if it should come to the fact that he goes to trial and is found guilty, he cannot appeal on the fact that his lawyer's father invested in Madoff, that he once represented some business partners of Madoff and that he had some retirement money with Madoff.

SIEGEL: Okay. Thank you, Robert.

SMITH: You're welcome.

SIEGEL: That's NPR's Robert Smith who covered the Madoff hearing in New York today.

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Lawyer Says Madoff Will Plead Guilty

Former investment manager Bernard Madoff is expected to plead guilty to charges related to an international Ponzi scheme that allegedly bilked investors worldwide out of as much as $50 billion, his attorney said Tuesday.

Madoff, 70, is facing 11 counts related to the fraud, including securities fraud, investment adviser fraud, mail fraud, wire fraud, money laundering, making false statements, perjury, making false filings with the Securities and Exchange Commission, and theft from an employee benefit plan, according to the U.S. attorney's office in New York.

The financier allegedly perpetrated a scheme to defraud clients of billions of dollars from at least the 1980s until his arrest on Dec. 11. Prosecutors said he bilked investors out of as much as $50 billion in a Ponzi scheme in which old investors were paid off with the money of new investors.

The government alleges that Madoff promised some clients annual returns of up to 46 percent per year.

Madoff could be sentenced to 150 years in prison, the U.S. attorney's office said. At least 25 victims of Madoff's schemes are expected to speak at Thursday's hearing, during which Madoff is expected to enter a formal plea to the charges.

U.S. District Judge Denny Chin also ruled that Madoff may keep his lead defense attorney, Ira Lee Sorkin, despite conflict-of-interest claims by prosecutors. The judge asked Madoff, who was under oath, if he was satisfied with the performance of the lead defense attorney in the fraud case against him.

"I am," Madoff answered.

Prosecutors said Sorkin's parents invested about $900,000 with Madoff. After they died, they left the investment in a trust for Sorkin's two sons. Sorkin has told the government that he is a trustee of the sons' trust accounts but has never had a beneficial interest in the money, according to court documents.

In addition, Sorkin represented two accountants linked to Madoff in a 1992 case brought by the Securities and Exchange Commission.

Sorkin also invested almost $20,000 with Madoff, but that investment was liquidated more than 10 years ago, prosecutors said.

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