Madoff to stay in jail until sentencing

A court decision Friday means Bernard Madoff probably will never again see his $7 million Manhattan penthouse.

A federal appeals court ruled that Madoff must remain in jail until he is sentenced to what is expected to be a lifetime behind bars. A three-judge panel agreed with prosecutors there was a good chance Madoff would go on the lam if he were released.

“In light of the defendant’s age (70) and the length of potential sentence (150 years), he has an incentive to flee, and that because he has the means to do so, he presents a risk of flight, and therefore should not be released,” Judges Dennis Jacobs, Robert D. Sack and Richard C. Wesley said in a written opinion.

The judges dismissed a defense argument that the man guilty of perpetrating the biggest Ponzi scheme in U.S. history no longer has the means to go on the run. While authorities have seized Madoff’s assets, the judges hinted at the possibility he has more hidden.

“The defendant has a residence abroad, and has had ample opportunity over a long period of time to secret substantial resources outside the country,” they wrote.

Prosecutors declined comment on the ruling. Madoff’s lawyer refused to say whether he would appeal.

“We are disappointed and we respectfully disagree with the decision, but the court has ruled,” said defense attorney Ira Lee Sorkin.

Madoff pleaded guilty on March 12 to 11 charges stemming from his $65 billion Ponzi scheme. Judge Denny Chin ordered Madoff taken immediately to the Metropolitan Correctional Center in Manhattan, N.Y., where he is to remain until his June 16 sentencing.

Madoff’s lawyers had hoped their client would be allowed to remain under house arrest at his Manhattan penthouse. Madoff had been under home confinement since he was arrested in December.

The investigation is continuing, and earlier this week authorities arrested Madoff’s longtime accountant, who authorities say helped pull off the scam. Madoff’s wife, brother and two sons remain under suspicion.

There is no indication Madoff is working with investigators. He pleaded guilty without an agreement, so he is not required to cooperate.

Prosecutors said they have recovered about $1 billion related to the fraud, but conceded most of the money lost by investors is gone forever. Madoff’s victims include well-known people such as actor Kevin Bacon and 1986 Nobel Peace Prize winner Elie Wiesel. His scam also devastated pension funds and charities.

Madoff was an esteemed, even mysterious, figure who lured investors with a whiff of exclusivity and talk of complicated investment maneuvers. He took great pains to hide his Ponzi scheme, sending clients fake monthly reports and hiring staff with little training in the securities industry. And despite his big talk of complex strategies, Madoff now says he simply put the money into an account at Chase Manhattan Bank.

The scam unraveled as a consequence of the current economic downturn. Madoff turned himself in to FBI agents in December and confessed.