Bernard Madoff was charged Tuesday with 11 counts alleging he ran Wall Street's biggest Ponzi scheme, and he could face up to 150 years in prison when he pleads guilty Thursday, officials said Tuesday.
Federal prosecutors unveiled the charges, as well as the 70-year-old's prospect of dying behind bars, during a court appearance in which the disgraced investment adviser told a judge that he wanted to keep his lawyer despite potential legal conflicts.
Click for photos of Madoff on Tuesday
The attorney, Ira Sorkin, said Madoff intends to plead guilty to the charges Thursday.
In disclosing the charges, prosecutors revealed that Madoff is accused of mail fraud, wire fraud, securities fraud and money laundering in connection with a $50-billion Ponzi scheme that allegedly ran for more than 25 years. He is also charged with perjury, giving false statements to the Securities and Exchange Commission and stealing from an employee benefit program.
"From at least as early as the 1980s through on or about Dec. 11, 2008, Bernard L. Madoff, the defendant, perpetrated a scheme to defraud the clients of Bernard L. Madoff Investment Services by soliciting billions of dollars of funds under false pretenses," prosecutors said in charging documents presented in federal court in Manhattan.
"I think 150 years is in the right direction," said investor Burt Ross of Englewood, N.J. "When will he go to jail?"
The documents didn't spell out a specific of investor losses. But the charges noted that as of November, Madoff's clients received statements showing total balances in their accounts of $64.8 billion, when the amount was just a fraction of that. When he was arrested, Madoff allegedly told investigators his scheme totaled $50 billion.
The charges also indicate other unnamed Madoff employees took part in the alleged scheme by generating false account statements and trading tickets to show investment activity that didn't exist.
There was no word on Madoff's wife, Ruth, who may be counseled by the law firm of former federal prosecutor Peter Chavkin, who was in court Tuesday as a special counsel to advise Madoff on the conflict-of-interest issues involving Sorkin. Chavkin has cited that possibility.
Madoff, under house arrest after posting a $10 million bond, also diverted $250 million in client funds over a six-year period to fund the operation of his legitimate market-making activities, according to the documents.
Disclosure of the charges overshadowed the ostensible reason for the court hearing, which was the conflict of interest issue. On that point, Madoff, who had come to court wearing a protective vest, spoke publicly for the first time. Dressed in a gray suit and leaning against a table, Madoff for 12 minutes answered repeatedly with "Yes," and "Yes, I am," when asked by U.S. District Court Judge Denny Chin if he understood or was aware of the nature of Sorkin's potential conflicts.
Sorkin had represented two men who are potential witnesses against Madoff, and Sorkin family members had prior investments with Madoff's company. Sorkin himself also at one point had about $60,000 in retirement money invested with Madoff, but took it out around 1993, court papers disclosed.
Prosecutor Marc Litt revealed Madoff hasn't signed an agreement with the government, indicating he would have to plead guilty to all charges and could face up to 150 years under the advisory federal guidelines.
"He is throwing himself at the mercy of the court," said a defense attorney not involved in the case who didn't want to be named.
Because none of the charges have a life term, Litt said the 150 years was calculated based on various offense levels for the separate crimes. Chin said sentencing would take place "several months" after any guilty plea.
Click for photos of Madoff on Tuesday