Madoff Pleads Guilty to $65 Billion Investment Scam

12 March 2009

Bernard Madoff arrives at Manhattan federal court, in New York, 12 Mar 2009
Bernard Madoff arrives at Manhattan Federal court, in New York, 12 Mar 2009

New York financier Bernard Madoff was jailed Thursday after pleading guilty to bilking investors out of an estimated $64.8 billion - the largest financial scam in U.S. history. Madoff now faces up to 150 years in prison. But investors who lost their savings say jail time is not enough.  

Bernard Madoff, 70, pleaded guilty to 11 counts of fraud, money laundering and perjury in New York Federal court. Madoff admitted he had been defrauding thousands of clients since the early 1990s - operating a classic Ponzi scheme - using the money that new customers invested to pay those who wanted to withdraw funds. To some, he offered returns as high as 46 percent.

Madoff told the court he was "deeply sorry" and "ashamed" of his crimes. The judge ordered Madoff sent to jail immediately while he awaits sentencing on June 16. That decision brought applause in the courtroom.

Madoff's wide-ranging fraud touched banks, charities, middle class people investing for retirement in North and South America and Europe, and even celebrities - including Holocaust survivor Elie Wiesel.

Now that Madoff has admitted to his crimes, questions have turned to who else might have helped the disgraced financier operate the massive Ponzi scheme.

Former Securities and Exchange Commission Chairman Harvey Pitt said it is yet to be seen whether Madoff will cooperate in the investigation.

"Who helped him? I believe that he is determined to try and protect those people who assisted him," he said. "And he's going to have to be worn down in that process."

Madoff, a former NASDAQ chairman, was arrested just three months ago. Until Thursday, he had been living under house arrest in his luxury Manhattan apartment.

Those affected by his fraud have been enraged that Madoff could remain in luxury surroundings. About 20 of his victims were allowed to testify on Thursday.

Outside the courthouse, victim Richard Friedman, who lost millions of dollars from his retirement savings, said Madoff's guilty plea is not enough.

"What next? Will the government pursue anything else or is it all going to stop right now? It's important that the government pursue everything with the Madoff case to bring everyone else to justice," he said. "If Madoff acted alone, it would all end right now. There is no way this kind of operation could have taken place all by himself."

Victim Cynthia Friedman said she and her husband have had to rethink their future because of their losses. She said the government should pursue financial restitution for all of Madoff's victims.

"He's evil, he's evil! He's way up there with all the evil people in the world," she said. "He stole from charities, from pensioners. I mean he's horrible! From friends, from widows - he's awful!"

To date, no one else has been charged in connection with the scam.