150 Years for Bernie? By All Means, Say Feds

[WSJ_law_blog]

Just mere moments ago, we got a copy of the government’s sentencing memorandum in the Madoff case. (Again, Bernie Madoff, who in March pleaded guilty to 11 charges related to a massive investment fraud, is slated to be sentenced on Monday). Click here for the memorandum. Let us hit you, for now, with the highlights.

The memorandum opens, in no uncertain terms:

Defendant Madoff’s crimes were of extraordinary dimensions. For example, the fraud loss known to date, which is greater than $13 billion, is more than thirty-two times the baseline level of loss that would carry a sentence of life under the U.S. Sentencing Guidelines (“U.S.S.G”). He engaged in wholesale fraud for more than a generation; his so-called “investment advisory” business was a fraud; his frauds affected thousands of investors in the United States and worldwide; and he repeatedly lied under oath and filed false documents to conceal his fraud. The scope, duration and nature of Madoff’s crimes render him exceptionally deserving of the maximum punishment allowed by law, and the Guidelines advise a sentence of 150 years (consisting of consecutive terms of the maximum term of imprisonment for each count of conviction, as discussed below). Further, comparisons of this case with the many large and egregious fraud cases in this District, only underscore the enormity of Madoff’s offenses. Accordingly, we respectfully submit that a reasonable sentence in this case would be the Guidelines sentence of 150 years or, alternatively, a term of years that both would assure that Madoff will remain in prison for life, and forcefully would promote general deterrence.

On the ongoing nature of the fraud, the government writes:

With respect to his patent disrespect for law and basic ethical conduct, the duration of Madoff’s criminal conduct speaks for itself. His crimes were not a one-time event arising, for example, from a split-second decision made under financial duress. Rather, Madoff’s crimes were the product of a series of decisions made over the course of years, and it was within his power to stop his crimes at any point in time.

. . .

Although Madoff could have ended his scheme at any time, he chose not to do so. Instead, Madoff waited until late 2008, but only after he ran out of ways to keep the fraud alive. By then, when he revealed to his sons his purported plans to turn himself in, his scheme was on the verge of collapsing under its own weight. Within days, investors would have been unable to redeem billions of dollars and inevitably would have complained to the authorities.

Madoff’s lawyers argued earlier this week that Madoff deserved some credit for turning himself in.
On that point, the government writes:

Madoff’s claim that he deserves credit for “turning himself in” misses the mark. In fact, Madoff waited to tell his family of his purported plans to turn himself in only when it became clear, and inevitable, that his scheme would collapse, he was almost out of money, and he faced redemption requests that he knew he could not meet. Even then, he took steps that were inconsistent with any real acceptance of responsibility for his acts. For example, he directed the preparation of approximately 100 checks totaling $173 million made out to preferred customers, employees, friends and family, thereby attempting to dissipate investors’ remaining assets. Had the FBI not arrested him the next day, he might well have succeeded.

The government also takes issue with the contention made by Madoff’s lawyer, Ike Sorkin, that a 12-year sentence is adequate:

Moreover, the defense request for a 12-year sentence should also be rejected because such a sentence would not distinguish this case from the mine run of securities fraud cases that in this District regularly result in sentences of 10 to 15 years. Indeed, the Guidelines call for a sentence of 11 to 14 years in a typical fraud case involving losses less than $20 million. Such crimes are serious, and are deserving of commensurate punishment; however, in this case, sentencing the defendant to a term of imprisonment comparable to that regularly imposed on such smaller-dollar fraud cases would not adequately account for the magnitude of defendant’s crimes and would result in the very sentencing disparity that Section 2553(a)(6) and the Guidelines seek to prevent.