Sins and Admission: Getting Into the Top Prisons

By DIONNE SEARCEY and AMIR EFRATI

The federal judge overseeing the trial of Bernard Madoff said he would recommend the man who pulled off the biggest Ponzi scheme in U.S. history serve out his sentence in the Northeast. Instead, Mr. Madoff landed in a prison nearly 500 miles away from his New York home, in North Carolina.

How Mr. Madoff ended up in a medium-security facility at Butner Federal Correctional Center could remain a mystery. The Bureau of Prisons won't discuss the placement of specific inmates, and even veteran attorneys are often left to scratch their heads at why their clients wind up in particular facilities.

But the bureau has created guidelines. Criminal defense attorneys and prison consultants who have made careers of trying to perfect the art of swaying placement also shed some light on what factors federal officials may have used to send Mr. Madoff to Butner.

Life in Prison

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See where prominent white-collar criminals are serving time.

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Bernard Madoff Psychic Profile: Peggy Rometo on Where the Money Went and More

Where did Madoff stash the billions? How much did Ruth know? Does the former NASDAQ chairman feel any shame?

Bernard L. Madoff, the man who masterminded what is believed to be the largest Ponzi scheme in history, was jailed yesterday after pleading guilty to 11 charges including securities fraud, wire fraud, mail fraud and money laundering. The disgraced Wall Street trader, who said he was "deeply sorry and ashamed" for swindling investors out of $65 billion, will face 150 years behind bars when he is sentenced in June. We asked wOw Intuitive Peggy Rometo how it all came to pass — and what’s in store for America’s most hated villain.

wOw: How did it all begin?

Peggy: My feeling is that Madoff was approached by an underground group, possibly originating in Argentina or somewhere else in South America, to find a simple, creative way to make some extra money. I think he saw it as easy, conceptual, no big deal. It all began with an offshore investment and willing partners. He felt very protected within this network, and well hidden from the law.

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You're Grounded!

How do you qualify for house arrest?

By Juliet Lapidos

Marc Dreier, the New York lawyer charged with defrauding his investors out of $400 million, failed to make bail last Thursday. He will await trial in prison rather than at home, because he could not meet the conditions set by Judge Douglas Eaton—namely, a $20 million bond and at least four "responsible" co-signers. By contrast, Bernie Madoff, who confessed to a $50 billion Ponzi scheme, was released on $10 million bail and has been living under house arrest in his Manhattan penthouse since December. Who qualifies for house arrest?

Those unlikely to break the terms of their confinement. Judges may impose house arrest in lieu of incarceration before trial (as a condition of bail) or as a sentence. Prior to sentencing, judges are chiefly concerned with the risk of flight—determined based on criminal record, a person's ties to the community (does he have a family to support?), and his visibility (will someone notice if he tries to fly the coop?). Judges considering house arrest instead of jail time are mostly concerned with the likelihood of recidivism. While it's not common for convicts to serve out an entire sentence at home, nonviolent offenders may get away with a jail-free punishment if they have a clean rap sheet, a steady employment history, and no gang affiliation. Parole commissions may also impose home confinement instead of releasing an offender after he's served a prison sentence. This option is especially common for sex offenders.

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Blame the Enablers

I couldn’t agree with this article more: Madoff Enablers Winked at Suspected Front-Running. I look at Madoff as a Sociopath — he is a sick individual. The enablers, on the other hand, were simply greedy hacks who didn’t, (and probably couldn’t) do the suitable investigation and due diligence into Madoff’s asset management business.

Were they Corrupt? Incompetant? Both? Who is to say. The bottom line is they lost all of their clients’ monies, and need to be held accountable.

Excerpt:

If the 70-year-old money manager was running a con, then his marketers like Access International, wittingly or not, were part of the scam.

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And still Madoff is the only one under arrest. Anyone get the idea that the whole system is corrupt? Tom

Madoff's fund may not have made a single trade

Fri Jan 16, 2009 6:55am EST
By Jason Szep

BOSTON (Reuters) - Bernie Madoff's investment fund may never have executed a single trade, industry officials say, suggesting detailed statements mailed to investors each month may have been an elaborate mirage in a $50 billion fraud.

An industry-run regulator for brokerage firms said on Thursday there was no record of Madoff's investment fund placing trades through his brokerage operation.

That means Madoff either placed trades through other brokerage firms, a move industry officials consider unlikely, or he was not executing trades at all.

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And of course the pundits on CNBC are still warning against having too much regulation. Not only was there not enough regulation under Bush, there was zero enforcement. Total financial collapse and how many people have been arrested? Tom

Austria’s ‘Woman on Wall St.’ and Madoff

By NELSON D. SCHWARTZ and JULIA WERDIGIERPublished: January 6, 2009 VIENNA —

With an aggressive style that stood out in the staid world of Austrian banking even more than her bouffant red wig, Sonja Kohn made few friends gathering billions for Bernard L. Madoff from wealthy investors in Russia and across Europe.

Now, she has even fewer. Mrs. Kohn has dropped out of sight, leaving the firm she founded, Bank Medici, in the hands of Austrian regulators, who took it over last week.

Embarrassment from investing heavily with Mr. Madoff could explain wanting to disappear from public view. But another theory widely repeated by those who know Mrs. Kohn is that she may be afraid of some particularly displeased investors: Russian oligarchs whose money made up a chunk of the $2.1 billion that Bank Medici invested with Mr. Madoff.

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Nice to know the good company the UofT pension plan was investing with.....Russian Oligarchs. I guess a piddling little $4 or $5 million investment doesn't require any due diligence. Drop in the bucket. Tom

Madoff Scandal Threatens Country’s Criminal Justice Organizations

Posted by Dan Slater

Tallying the losers in the Madoff scandal has become somewhat of a parlor game. On the legal front, we’ve seen the New York Law School emerge as an alleged victim. But the criminal justice system is reeling, as well.

Earlier this month, the JEHT Foundation — a major financial supporter of the Innocence Project in Texas, among others — announced it would shut its doors in January because its prime donors invested with Madoff. JEHT, according to this Business Week article, is a six-year-old New York City-based philanthropy focused on juvenile and criminal justice, human rights, and election reform.

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The fallout from the Madoff Ponzi Scheme gets weirder and weirder. BTW the geniuses running UofT's pension plan just reported that the plan lost 4 or 5 million dollars that was invested with Madoff. Tom

Bernie Madoff's Shady Schemes Should Have Set off Alarms Long Ago

By Arianna Huffington, Huffington Post. Posted December 15, 2008.

One ponzi scheme after another is exposed on Wall Street, and so far all we've heard is: "Who could have known?"

See if this sounds familiar:

An ambitious and risky undertaking carried out with hubris, and featuring the weeding out of anyone who raises alarm bells, little-to-no transparency, an oversight system in which no central authority is accountable, and the deliberate manufacturing of ambiguity and complexity so that if -- when -- it all falls to pieces, the excuse "who could have known?" can be used….

Is it Iraq? Fannie Mae? Citigroup? Bernie Madoff?

The correct answer is: all of the above.

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