Jan. 13 (Bloomberg) -- U.S. Representative Anthony Weiner denounced a federal judge’s decision to allow Bernard Madoff to remain free on bond while awaiting trial for allegedly running a $50 billion Ponzi scheme.

“He should not be living at home, he should be in a jail cell,” said Weiner, a Democrat from New York, at a press conference yesterday in front of Madoff’s Manhattan apartment on East 64th Street. His comment followed the judge’s ruling in Manhattan federal court. “This judge doesn’t seem to get it.”

U.S. Magistrate Judge Ronald Ellis said Madoff, 70, may remain free on a $10 million bond, denying a request by federal prosecutors that he be jailed because he mailed a diamond necklace, Tiffany and Cartier watches and other jewelry to relatives. The mailing violated a court-ordered asset freeze.

Ira Sorkin, Madoff’s defense lawyer, said in court papers that his client didn’t know the order applied to personal items. Madoff was arrested last month and faces up to 20 years in prison for securities fraud.

Weiner said he “hopes to keep the pressure on” to force the judge to revoke bail. “He is a classic flight risk,” he said.

The government said it will appeal and asked the judge to delay his order. Ellis wouldn’t comment on any aspect of his ruling, said a spokeswoman in his office, who declined to give her name.

Bail Reform Act

“If Mr. Weiner familiarized himself with the facts and the Bail Reform Act and read the decision, he is entitled to his opinion,” Sorkin said. The U.S. Bail Reform Act specifies the conditions under which a defendant is subject to detention without bail.

Some residents living near Madoff’s penthouse apartment at 64th Street and Lexington Avenue in Manhattan expressed outrage at the ruling.

Dawn Pohl, a real estate broker who said she lives on 72nd Street, said Madoff deserves to be imprisoned.

“Other people go to jail for much less severe offenses, while he is sitting in the lap of luxury,” Pohl said. “It’s almost as if he’s being rewarded for what he’s done. I think it’s a disgrace.”

Ellis made his ruling based on his judgment of whether Madoff was likely to flee or be a danger to the community, said Robert Mintz, a partner with McCarter & English in New York, in an interview on Bloomberg TV. Madoff has surrendered his passport and is under guard and restricted to his home.

Plea Possible

“It’s unlikely to see it go to trial,” Mintz said. “The defense is working out some kind of a plea and trying to find a way they can assist the government in terms of locating assets, explaining the way the scheme was carried out.”

Press photographers and camera crews crowded outside of Madoff’s apartment yesterday morning in hopes of seeing the investment adviser. Ellis ruled Madoff may continue to live under house arrest and electronic monitoring. He set new conditions, ordering Madoff to compile an inventory of all items in his home and barring him from transferring property.

Madoff didn’t appear in court or leave his apartment by midafternoon. Madoff sent other tenants in his building a note apologizing for the inconvenience he’s caused them, the New York Times reported.

“Somebody caught selling bogus Louis Vuitton goes to jail, but not him,” said Risa Pilicer of Great Neck, New York, as she walked by the building. Pilicer said she works on East 62nd Street. “He deserves jail -- three hots and a cot.”

Skyler Horowitz, a lawyer who said he lives on East 64th Street, said as he passed the investment adviser’s building that he was “insane to think he could get away with it.”

“I woke up and said I don’t know if I can trust my stockbroker,” Horowitz said. “I don’t know who to trust.”

The case is U.S. v. Madoff, 08-mag-2735, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Cynthia Cotts in New York at ccotts@bloomberg.net and; Lindsay Fortado in New York at lfortado@bloomberg.net.

Last Updated: January 13, 2009 13:41 EST