Madoff gets 150 years; judge sends warning

NEW YORK - Historic swindler Bernard Madoff was sentenced to 150 years in prison Monday for a fraud so extensive that the judge said he needed to send a symbolic message to potential imitators and to victims who demanded harsh punishment.

Scattered applause and whoops broke out in the crowded Manhattan courtroom after U.S. District Judge Denny Chin issued the maximum sentence to the 71-year-old defendant, who said he lives "in a tormented state now, knowing all the pain and suffering I've created."

Chin rejected a request by Madoff's lawyer for leniency and said he disagreed that victims of the fraud were seeking mob vengeance.

"Here the message must be sent that Mr. Madoff's crimes were extraordinarily evil and that this kind of manipulation of the system is not just a bloodless crime that takes place on paper, but one instead that takes a staggering toll," Chin said.

The judge said the estimate that Madoff has cost his victims more than $13 billion was conservative because it did not include money from feeder funds.

"Objectively speaking, the fraud here was staggering," he said.

Madoff's victims might not have become financially better off by the sentence, but they were pleased at the maximum sentence that will not allow Madoff to ever again be a free man.

Among them was Michael DeVita, 59, of Chalfont, Bucks County, who was there with his mother, Emma, 81. They invested separately but lost more than $1 million combined.

Michael DeVita flashed a victory signal as he exited the courthouse.

Albert Dandridge, a former official at the Securities and Exchange Commission, who is now at a Philadelphia law firm, talked of the strong message being sent by the sentencing judge:

"I am not surprised by the 150-year sentence Judge Chin handed down to Bernard Madoff today," said Dandridge, who is now a partner at Schnader Harrison Segal & Lewis LLP in Philadelphia.

Dandridge said he believed the court probably realized that Madoff worked with others to perpetrate the Ponzi scheme.

"Madoff was probably going to spend the rest of his life in prison no matter what – however, I believe a message is being sent to those who may have been participants in this fraud with Bernie Madoff. Such a sentence will give the SEC and DOJ [Department of Justice] leverage with respect to such persons to get to the bottom of the scheme notwithstanding Bernie Madoff's non-cooperation."

Before Chin announced the sentence, Madoff, wearing a dark suit, white shirt and a tie, sat and listened as emotional witnesses described how he spoiled their security. Madoff looking thinner than his last court appearance in March.

He gave no noticeable reaction when the sentence was announced.

He also showed no emotion earlier in the hearing as he listened to nine victims spend nearly an hour describing their despair. Some openly wept. Others raised their voices in anger.

"Life has been a living hell. It feels like the nightmare we can't wake from," said Carla Hirshhorn.

"He stole from the rich. He stole from the poor. He stole from the in between. He had no values," said Tom Fitzmaurice. "He cheated his victims out of their money so he and his wife Ruth could live a life of luxury beyond belief."

Dominic Ambrosino called it an "indescribably heinous crime" and urged a long prison sentence so "will know he is imprisoned in much the same way he imprisoned us and others."

He added: "In a sense, I would like somebody in the court today to tell me how long is my sentence."

When asked by the judge whether he had anything to say, Madoff slowly stood, leaned forward on the defense table and spoke in a monotone for about 10 minutes. At various times, he referred to his historic fraud as a "problem," "an error of judgment" and "a tragic mistake."

He claimed he and his wife were tormented, saying she "cries herself to sleep every night, knowing all the pain and suffering I have caused," he said. "That's something I live with, as well."

He then finally looked at the victims lining the first row of the gallery.

"I will turn and face you," he said. "I'm sorry. I know that doesn't help you."

Afterward, Ruth Madoff - often a target of victims' scorn since her husband's arrest - broke her silence by issuing a statement through her lawyer. She said she, too, had been misled.

"I am embarrassed and ashamed," she said. "Like everyone else, I feel betrayed and confused. The man who committed this horrible fraud is not the man whom I have known for all these years."

Prosecutor Lisa Baroni said Bernard Madoff deserved a life sentence because he "stole ruthlessly and without remorse."

Madoff already has taken a severe financial hit: Last week, a judge issued a preliminary $171 billion forfeiture order stripping Madoff of all his personal property, including real estate, investments, and $80 million in assets his wife Ruth had claimed were hers. The order left her with $2.5 million.

The terms require the Madoffs to sell a $7 million Manhattan apartment where Ruth Madoff still lives. An $11 million estate in Palm Beach, Fla., a $4 million home in Montauk and a $2.2 million boat will be put on the market as well.

Before Madoff became a symbol of Wall Street greed, he had earned a reputation as a trusted money manager with a Midas touch. Even as the market fluctuated, clients of his secretive investment advisory business - from Florida retirees to celebrities such as Steven Spielberg, actor Kevin Bacon and Hall of Fame pitcher Sandy Koufax - for decades enjoyed steady double-digit returns.

But late last year, Madoff made a dramatic confession: Authorities say he pulled his sons aside and told them it was "all just one big lie."

Madoff pleaded guilty in March to securities fraud and other charges, saying he was "deeply sorry and ashamed." He insisted that he acted alone, describing a separate wholesale stock-trading firm run by his sons and brother as honest and legitimate.

Aside from an accountant accused of cooking Madoff's books, no one else has been charged. But the family, including his wife, and brokerage firms who recruited investors have come under intense scrutiny by the FBI, regulators and a court-appointed trustee overseeing the liquidation of Madoff's assets.

The trustee and prosecutors have sought to go after assets to compensate thousands of burned victims who have filed claims against Madoff. How much is available to pay them remains unknown, though it's expected to be only a fraction of the astronomical losses associated with the fraud.

The $171 billion forfeiture figure used by prosecutors merely mirrors the amount they estimate that, over decades, "flowed into the principal account to perpetrate the Ponzi scheme." The statements sent to investors showing their accounts were worth as much as $65 billion were fiction.

The investigation has found that in reality, Madoff never made any investments, instead using the money from new investors to pay returns to existing clients - and to finance a lavish lifestyle for his family.

In bankruptcy filings, Trustee Irving Picard say family members "used customers accounts as though they were their own," putting Madoff's maid, boat captain and house-sitter in Florida on the company payroll and paying nearly $1 million in fees at high-end golf clubs on Long Island and in Florida.

Picard has sought to reclaim ill-gotten gains by freezing Madoff's business bank accounts and selling legitimate portions of his firm. (Its season tickets for the Mets went for $38,100.) He's also sued big money managers and investors for billions of dollars, claiming they were Madoff cronies who also cashed in on the fraud.

The defendants include leading philanthropists Stanley Chais and Jeffry Picower - from whom Picard is seeking at least $5.1 billion alleged to have come out of victims' pockets - and hedge fund manager J. Ezra Merkin. All have denied any wrongdoing.

Madoff's fraud touched the Philadelphia region, too (read more in the related-stories links):

One victim was Mike Robinson, 36, of Downingtown, who said he and his family had invested between $15 million and $20 million with Madoff beginning in the early 1990s - money that is now gone.

Maureen Ebel, a widow who lives outside West Chester, thought she had $7.3 million with Madoff. Her uncle got her into Madoff's fund; he, too, has suffered big losses.

A host of local institutions had received money from foundations that had been invested with Madoff. They included the Association of Paroling Authorities, International, Wallingford ($200,000); Pew Charitable Trusts ($750,000); Trustees of University of Pennsylvania Research, Philadelphia ($117,500); Melmark Home, Berwyn ($25,000); and University of Pennsylvania School of Medicine, Philadelphia ($450,000).

Fallout from the scandal has touched more than just those involved in the case, said Richard A. Levan, a Philadelphia securities lawyer and former assistant U.S. attorney in Washington and senior SEC trial lawyer in Philadelphia, whose clients include a Madoff "feeder fund" whose investors lost money.

"What's changed dramatically is the tone and toughness of the regulators since the Madoff scandal broke," Levan said. "It is palpable. I find they are more active, less flexible, and in search of tougher penalties."