Madoff punished for biggest fraud of the century (News Feature)

By JT Nguyen and Chris Cermak Jun 29, 2009, 21:30 GMT

New York - Bernard Madoff will spend the remainder of his days in prison for defrauding his unsuspecting clients of billions of dollars, but even the maximum sentence will not console victims who are still trying to recover their cherished life savings.

Madoff was sentenced Monday to 150 years in prison by New York Judge Denny Chin, who handed out the highest penalty possible and argued it was in keeping with the 'unprecedented' fraud he committed.

The sentence prompted a brief round of applause from victims in the court, many of whom lost their retirement money to the 71-year- old former Wall Street financier. Yet it will be years before most see any of their money returned.

Madoff had to withstand a vicious onslaught in the courtroom Monday. The one-time high-flying investor has become the chief villain of a Wall Street crisis that was bred by greed, forced the world into recession and plunged many families into hard times.

Victims called him a 'monster' and a 'beast' and many cried as they told their stories. Chin said his crimes were 'extraordinarily evil.' Even his lawyer, Ira Sorkin, called him a 'deeply flawed individual.'

Madoff was arrested in December and pleaded guilty in March to running a pyramid 'Ponzi' scheme, under which his firm paid huge returns to old investors by collecting money from new ones. The scheme had been going since at least the 1990s.

Madoff claimed his company had 65 billion dollars in its accounts in November, shortly before it declared bankruptcy as the financial crisis prompted many investors to withdraw their funds. Only a fraction of that money remains.

'The fraud is staggering,' Chin said before reading out the sentence. 'The breach of trust is massive.'

But many also blame US government regulators, in particular the Securities and Exchange Commission (SEC), for failing to detect and stop Madoff's fraud.

'It's too late now,' said Mahendra Perampalan, a Sri Lankan who was visiting New York with his family and walked by the court house in lower Manhattan. 'The government knew about it. Why didn't they act before? It's politics.'

But Judge Chin brushed off the accusation against the US government and arguments from the defence that Madoff, with a life expectancy of 13 more years, deserved a 12-year prison sentence.

Outside the courtroom, a throng of television networks and onlookers fput a stop to traffic in busy lower Manhattan. Inside, hundreds of reporters, court employees and some victims were pushed into overflow rooms.

Sorkin had branded the media frenzy over the case and the virulent attacks by the victims a form of 'mob vengeance.' Chin, who calmly rejected that charge, allowed nine of the hundreds of victims to plead for their cases against Madoff.

'My job was eliminated and life savings taken away. At 33, I am wiped out,' said Michael Schwartz, who also takes care of his disabled brother. 'Madoff stole from the disabled. He killed my dreams.'

'I only hope that the sentence will be long enough so his jail will become his coffin,' Schwartz said.

Madoff had no visible reaction to the sentence and showed no emotion in his voice as he offered an apology to the victims. Since his arrest more than six months ago, he has typically displayed indifference during rare public and court appearances.

Madoff said he would 'live in a tormented state' for his crimes. Turning directly to face the victims present in the room, he said: 'I apologize to you, my victims. I'm sorry.'

Chin said Madoff deserved the highest penalty for a 'calculated, well orchestrated, long-term fraud' that was 'unprecedented in this century' and caused a 'staggering human tragedy.'

He said the sentence was also intended to deter other Wall Street investors from cheating clients. The decision dwarfs the jail terms handed down to other white collar criminals, including the 25 years given to WorldCom chief executive Bernard Ebbers.

Yet the Madoff saga is far from over. Many victims could be fighting for many more years to get back their money.

A court-appointed lawyer charged with liquidating Madoff's assets has identified more than 1,300 investors around the world that are owed more than 13 billion dollars, but he has recovered only 1.2 billion dollars by selling off assets so far.

Madoff and his family were ordered Friday to give up about 80 million dollars in villas, yachts and other property. More lawsuits are pending - some investors that managed to withdraw their funds before the bankruptcy could be forced to give some of the money back.

The government is also still considering bringing charges against accomplices. Prosecutor Lev Dassin said the investigation would continue.

'We are committed to bringing additional charges against anyone else who bears criminal responsibility,' Dessin said in a statement. At the same time, we are focused on tracing, restraining and liquidating assets to maximize recoveries for the victims.'