- The Washington Times - Tuesday, June 30, 2009

NEW YORK | With Bernard Madoff under sentence to spend what likely will be the rest of his life in prison for perpetrating the largest Wall Street Ponzi scheme in history, the focus shifts to his victims’ efforts to salvage whatever they can from the wreckage of the criminal enterprise.

Madoff, the 71-year-old former Nasdaq chairman, was sentenced Monday to 150 years in federal prison.

Of the many victims who flocked to the courthouse one, Judith Willing, dressed for her day in court in a gauzy white blouse and matching straw hat, told reporters that she and her husband had lost $2.5 million, “a huge amount to us.”

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She said they had used the money for charity, helping grandchildren through school and “the usual things.”

After U.S. District Judge Denny Chin imposed the sentence, the courtroom erupted in applause.

Madoff’s $65 billion fraudulent scheme wiped out the assets of thousands of investors around the world.

Madoff sat quietly in the ornate federal courtroom, and he barely reacted to his punishment.

He also sat impassively as nine court-selected victims read out bitter statements about their evaporated retirement accounts and slashed philanthropy budgets.

“Life has been a living hell,” said Carla Hirshhorn. “It feels like the nightmare we can’t wake from.”

Madoff “discarded me like roadkill,” Miriam Siegman told the court, adding that she is digging through trash bins and using food stamps.

His victims included movie mogul Steven Spielberg, many Palm Beach, Fla., millionaires and countless numbers of small investors whose lifetime retirement savings were funneled into his operations through so-called “feeder funds.”

Irving Picard, the court-appointed lawyer who is untangling Madoff’s businesses, told the court Monday that Madoff hasn’t provided “any meaningful cooperation” since he was arrested.

“I don’t ask for any forgiveness,” Madoff told Judge Chin before sentencing.

“Here the message must be sent that Mr. Madoff’s crimes were extraordinarily evil,” Judge Chin said before imposing the sentence. The judge cited the “staggering toll” of Madoff’s crimes.

Prosecutors had requested the maximum 150-year prison term suggested by federal guidelines. Madoff’s attorney, Ira Sorkin, had sought a term of 12 years.

Madoff pleaded guilty in March to 11 criminal counts, including securities fraud, investment adviser fraud, multiple counts of money laundering, wire fraud, false filings and false statements. He has been held in a federal prison since his guilty plea.

Just weeks before Madoff admitted the massive fraud late last year, his customers were told they had as much as $65 billion in their collective investment accounts. In fact, the government has said, those accounts “held only a small fraction of that balance.”

To date, only a small portion of that money has been recovered. Insurance will cover some of the losses. However, the Securities Investor Protection Corp., a government-chartered, brokerage-financed insurance agency, provides only $500,000 in maximum, upfront compensation to eligible victims.

Mr. Picard, the trustee, is seeking to “claw back” more than $10 billion from investors who withdrew large amounts of money in recent years. Some investors have already sued over the methodology that Mr. Picard plans to use to compensate victims. Experts expect the litigation and recovery battles to last more than a decade and perhaps as long as the scheme itself.

So far, prosecutors have said they have identified more than 1,300 investors who have lost more than $13 billion since 1995 from Madoff’s Ponzi scheme. That total doesn’t include the feeder accounts. The total losses are expected to rise significantly. So far, only $1.2 billion has been recovered.

For years, Madoff had the reputation of a money manager with the Midas touch. Regardless of the performance of the economy or the stock market, his clients could count on double-digit annual returns.

The investigators looking into Madoff’s operations say the scheme dates at least to the early 1980s. In March, Madoff said the scheme began during the 1990s.

Since at least 1995, Madoff never made any of the investments he claimed, investigators said. Instead, in a classic Ponzi operation, Madoff acknowledged using the inflow from longtime customers and new investors to finance the withdrawals of others.

Countless millions of dollars were used to finance Madoff’s luxurious lifestyle, which included an $7.5 million estate in Palm Beach, a $7.5 million Manhattan apartment, a $7 million home in Montauk, N.Y., a $2.2 million boat and $1 million memberships at high-end country clubs. Madoff’s $100,000-plus American Express statement for January 2008, less than a year before his scheme imploded, included $2,879 in charges at a Mexican restaurant, $8,400 for a single night at a Santa Monica hotel and $441 at a gourmet bagel shop. Madoff spent more than $250 at sushi bar and left a $15 tip.

On Friday, Madoff’s wife, Ruth, agreed to a settlement with the Justice Department. She will relinquish all assets jointly held with her husband. She will be left with $2.5 million.

Madoff told the court he lives “in a tormented state now, knowing all the pain and suffering I’ve created.” The U.S. Bureau of Prisons will now decide where Madoff will live - apparently, for the rest of his life.

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