Madoff Victim to Speak at Brother’s Sentencing, U.S. Says

More than 20 victims of Bernard L. Madoff’s fraud wrote to the court about its impact on their lives in advance of tomorrow’s sentencing of the confidence man’s brother, Peter, who pleaded guilty in June.

Peter Madoff, 67, who worked for Bernard L. Madoff Investment Securities LLC for four decades, pleaded guilty in June to helping his brother pull off the biggest Ponzi scheme in history. He denied knowing about the fraud and in court papers said he was a “victim” of his brother’s scheme.

As part of an agreement with prosecutors, Peter Madoff agreed not to seek less than the maximum 10-year prison term allowed by law and to forfeit his assets up to $143 billion. He asked the court to let him attend the bat mitzvah of his granddaughter before his prison term begins.

Michael DeVita, who said he and his wife, Emma, were victims of the Madoff fraud, asked to speak at the sentencing and wrote that Peter Madoff had to know about the fraud as it occurred “right under his nose.”

“It is beyond belief that Madoff alone carried out a crime lasting decades, involving hundreds of feeder fund money raisers, tens of thousands of investors and printing hundreds of thousands of stock confirmations and monthly statements,” DeVita wrote.

Own Account

DeVita wrote that Peter Madoff had admitted depositing a little more than $32,000 in his own personal BLMIS investment account and withdrawing more than $16 million.

“I ask that you show the same degree of compassion for Peter Madoff that he showed for us -- none!” DeVita wrote in his letter to U.S. District Judge Laura Taylor Swain in Manhattan. “You have an opportunity to give an enhanced degree of justice to Peter’s victims and at the same time send Wall Street a message that the white-collar crime of defrauding investors will result in much more than a fine or slap on the wrist.”

Many of the victims said they are in their 70s and 80s, and having lost their life savings, are now living on Social Security. One couple, Karl and Wanda Eisenhauer, wrote the judge to say they had to sell the family farm.

Jill and Nancy Miller wrote to the judge saying that after Peter Madoff’s sentencing was twice postponed, they saw him “out and about enjoying a leisurely lunch in an expensive Upper East Side restaurant where many of his victims would like to eat but can’t afford to.”

‘Savored the Food’

“I hope he savored the food ’cause that’s not what he will get in prison!” the Millers wrote.

Morton Chalek, 90, of Manhattan, said he was a veteran who flew 23 combat missions for the U.S. military during World War II. Chalek said his attorney introduced him to Madoff, his golf partner.

“Mr. Picard and his clan seem to be thriving,” said Chalek, adding that “my cause seems to be hopeless.” He said he was denied compensation from the Securities Investor Protection Corp.

“In one day, Bernie Madoff turned me from a millionaire into a pauper,” he said.

Wendy Olsen Clancy, a victim witness coordinator with the Manhattan U.S. Attorney’s office, said two victims will speak at the sentencing.

Peter Madoff’s guilty plea to two criminal charges came three years to the day after his brother was sentenced to 150 years in prison. During his plea hearing, Peter Madoff told the court he had no knowledge of Bernard Madoff’s scheme until Dec. 9, 2008, the night his brother confessed to him that the investment business was a sham. Bernard Madoff was arrested and confessed to authorities two days later, on Dec. 11, 2008.

Falsifying Records

Peter Madoff pleaded guilty to one count of conspiracy and one count of falsifying records of an investment adviser. Both offenses carry maximum sentences of five years in prison.

Prosecutors said Madoff, who trained as a lawyer, repeatedly lied and violated the trust investors put in the firm and also made false statements to regulators and auditors. The government said his crimes began in about 1996 and continued until December 2008 when the firm collapsed, which the U.S. said was the only reason his crimes stopped.

After learning of the Ponzi scheme, he said he helped his brother parcel out the $300 million remaining in the firm to select friends and family members.

“I was devastated, but nevertheless I did as my brother said, as I consistently had done for decades,” he told Swain when he pleaded guilty in June.

The case is U.S. v. Madoff, 10-cr-228, U.S. District Court, Southern District of New York (Manhattan).

Before it's here, it's on the Bloomberg Terminal. LEARN MORE