Letter of Apology » Madoff

The SEC and Bernard Madoff: Dereliction Of Duty

Solomon Wisenberg — Thu, 03 Sep 2009 00:13:14 +0000

Here at last is the Executive Summary to SEC Inspector General David Kotz’s “Investigation of Failure of the SEC to Uncover Bernard Madoff’s Ponzi Scheme.” sec-oig-madoff-executive-summary. The complete REPORT OF INVESTIGATION will apparently come out over the next several days. The SEC’s failure, as detailed in the Executive Summary, was more shocking and abysmal than I ever imagined. It makes me want to vomit. The Executive Summary takes about 15 minutes to read and is well worth the effort. The primary failure appears to have been at the supervisory level.

Di Pascali Federal Criminal Information

Solomon Wisenberg — Wed, 12 Aug 2009 18:47:51 +0000

Here it is, c/o the USDOJ SDNY website.

DiPascali Pleads Guilty, Agrees To Cooperate, Gets Placed In Custody

Solomon Wisenberg — Tue, 11 Aug 2009 21:59:37 +0000

The NYTimes story is here. Bloomberg’s update is here. Bernie Madoff’s statement (during allocution) that he acted alone is now unmistakably revealed as a fraud on the court.

DiPascali Guilty Plea in Progress

Solomon Wisenberg — Tue, 11 Aug 2009 19:51:06 +0000

The NYTimes reports here. The chart of charges is here. The Government’s endorsed letter regarding docketing of charges to be filed is here. The bail package recommendation/agreement is here.

Madoff Aide Set To Plead Guilty

Solomon Wisenberg — Tue, 11 Aug 2009 03:05:13 +0000

According to this piece in the Saturday WSJ, long time Bernie Madoff aide Frank DiPascali (who ran Madoff’s “trading operation”) is set to plead guilty to federal felony charges in Manhattan on Tuesday. If true, this should cause the dam to start breaking. As of this evening, however, no documents regarding DiPascali have been posted on PACER.

SEC Compliance Chief Resigns; Her Office Fiddled While Madoff Burned His Victims

Solomon Wisenberg — Thu, 09 Jul 2009 02:22:36 +0000

The Washington Post’s Zachary A. Goldfarb reports here that Lori A. Richards, longtime Director of the SEC’s Office of Compliance Inspections and Examinations, is resigning after 14 years on the job. Richards’ Office reviewed Madoff’s operations in 1999, 2004, and 2005, without uncovering his Ponzi scheme.

Last week’s Post carried this outstanding piece by Goldfarb on former Office of Compliance Inspections and Examinations attorney Genevievette Walker-Lightfoot. Walker-Lightfoot was hot on Madoff’s trail in 2004, raising and/or trying to ask several pertinent questions about Madoff’s activities, before she was re-assigned to other duties. Walker-Lightfoot’s supervisors at the time were Mark Donohue and his boss Eric Swanson. Swanson later married Madoff’s niece. The SEC’s Inspector General, H. David Kotz, claims to be currently looking at ”all the circumstances surrounding the SEC’s various examinations of Mr. Madoff, including the 2004 examination.” Stay tuned.

Madoff Receives 150 Years In Prison, But With Good Time He’ll Only Do 127.5

Solomon Wisenberg — Mon, 29 Jun 2009 18:42:10 +0000

The Wall Street Journal reports here on the 150 year term of imprisonment imposed today by U.S. District Judge Denny Chin on all-time Ponzi King Bernie Madoff. If he behaves himself in prison, Madoff will be eligible for release at the age of 199. Initial press reports do not indicate whether Madoff’s sentence includes a term of supervisory release following imprisonment, but it is statutorily mandated. Judge Chin called Madoff’s fraud “staggering” “unprecedented” and “evil.” Chin also said that the 150 year sentence was symbolically important in sending a general deterrence message to future fraudsters. It is clear that neither the judge nor prosecutor believes Madoff has been fully cooperative.

Madoff “Victim” Jeffrey Picower: Can Anyone Say Willful Blindness?

Solomon Wisenberg — Wed, 24 Jun 2009 03:35:57 +0000

Here is a fascinating story by Jake Bernstein of ProPublica.org about Madoff “victim” Jeffrey Picower. “Between December 1995 and December 2008, Picower and his family withdrew from their various Madoff accounts $5.1 billion more than they invested with the self-confessed swindler, according to a lawsuit filed by the trustee who is trying to recover money for those Madoff defrauded.” This is investigative reporting at its best.

Dewey Takes Manila, Madoff Stays In Jail.

Solomon Wisenberg — Fri, 20 Mar 2009 15:54:32 +0000

Surprise, surprise. The Second Circuit has affirmed Judge Chin on Bernie Madoff’s incarceration. Here is the WSJ alert.

Some Reflections On Madoff’s Guilty Plea

Solomon Wisenberg — Fri, 20 Mar 2009 04:20:34 +0000

There was much speculation in the white collar criminal defense community last week about why Bernard Madoff would plead straight up to the charges against him. This assumes that the choice was Madoff’s to make. In fact, there is no way that the U.S. Attorney’s Office for the Southern District of New York (”SDNY”) would have entered into a plea greement with Madoff, given his current posture.

Madoff maintains that none of his employees aided and abetted his massive Ponzi scheme. This is obviously a lie and SDNY doesn’t believe it for a minute. SDNY’s proffer sessions have already uncovered malfeasance by Madoff employees. So how could prosecutors enter into a plea agreement with someone who is already lying to them? A plea agreement presupposes that the defendant is being truthful with the government, at least at the outset. Even the relatively bare-bones SDNY white collar plea agreements typically give a defendant three points for acceptance of responsibility and provide that the agreement is null and void if the defendant lies. Plus, the parties must agree on a “factual basis” in support of the plea.

Thus, entering into an “agreement” with Madoff while he is lying about a key aspect of his crime is unthinkable. Quite simply it would be unethical for the SDNY to give its imprimatur to Madoff’s version of events by entering into a “bargain” with him. Besides, it’s not smart to bargain with the devil.

The government, on the other hand, could not and would not prevent a defendant from pleading straight up to all of the charges.

Madoff is determined to protect any and all who aided him in his crimes–a remarkable exhibition of his continuing sociopathy. The government will make him, his family, and his friends pay for it.