NEW YORK — Bernard Madoff, the New York financier accused of masterminding the biggest Ponzi scheme ever, plans to plead guilty this week to 11 felony charges that will probably put him behind bars for the rest of his life, his lawyer said Tuesday.
Madoff, 70, will admit to running a fraud dating back to the 1980s. He solicited billions of dollars from pension funds, charities and other investors, at times promising annual returns of as much as 46 percent, according to court documents filed Tuesday afternoon in U.S. District Court in Manhattan.
He set up accounts in London, in part to make it look like he was investing in European securities. To give his business an air of legitimacy, the documents said, Madoff hired numerous employees with little or no relevant training and had them generate false documents, including trading records and monthly statements to clients.
Prosecutors didn’t say whether his staff was aware of the fraud.
The new details about Madoff’s operations were collected by government investigators after his Dec. 11 arrest. Now, he is expected to plead guilty to securities fraud and 10 other charges revealed Tuesday: investment advisory fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings to the Securities and Exchange Commission, and theft from an employee benefit plan.
Denver’s dubious distinction
Denver ranks second after New York for Madoff victims, but that reflects about 800 self-directed individual retirement accounts listing a Denver post-office box. The accounts, registered under NTC & Co., belong to individuals across the country. NTC in turn, belongs to Fiserv, an IRA custodian with operations in Denver that Madoff used to set up accounts.
A handful of his victims live in Denver and Aspen and other mountain towns.
Boulder-based Agile Group has told clients, including talk-show host Mike Rosen and former U.S. Rep. Tom Tancredo, that it couldn’t return their investments because of dealings it had with Madoff and Minnesota businessman Tom Petters, who also is accused of running a Ponzi scheme.
A disclosure form that Tancredo filed with his 2007 presidential bid listed between $530,000 and $1.1 million invested in the Agile Safety Fund.
If found guilty on all counts, Madoff faces a maximum of 150 years in prison. The government is also seeking forfeitures of $170 billion.
By not entering a plea deal, Madoff may be trying to protect employees of his firm, said Chris Steskal, a former federal prosecutor.
Madoff’s brother Peter was chief compliance officer at the company, and his sons Mark and Andrew held senior positions in the market-making and proprietary trading businesses. None of Madoff’s family members have been accused of any wrongdoing.
New lawyer for his wife
Madoff’s wife, Ruth, who had been represented by his attorney, Ira Sorkin, will hire her own lawyer, Sorkin said.
Madoff has been free on $10 million bail but confined to his Manhattan penthouse, except to appear in court.
A 25-page court document filed immediately after the hearing said he solicited “billions of dollars” and promised a relatively straightforward investing strategy. He said he would invest in a basket of about 35 to 50 large U.S. companies. He would time those purchases, sometimes parking money in U.S. Treasurys. He would hedge the stock investments with options to sell the equities at a specified price in the future.
For investors who are hoping to recover their money, the documents may be discouraging. It said Madoff had used most of their funds to meet redemption requests.
It was not clear exactly how much money is left. As of Nov. 30, prosecutors said in the filing, Madoff’s firm reported having about 4,800 clients with a total of $64.8 billion. But, in fact, the business held “only a small fraction of that balance,” the document said.
Denver Post staff writer Also Svaldi and Bloomberg News contributed to this report.
