NEW YORK (AP) — The brother of imprisoned Wall Street financier Bernard Madoff on Thursday will face some of the heartbroken investors who lost their savings when the unprecedented fraud was revealed four years ago this month.
But, suspense over 67-year-old Peter Madoff’s sentencing will largely be absent because a plea agreement makes a 10-year prison term all but certain.
Peter Madoff, the former senior compliance officer at the Madoff private investment business, pleaded guilty to conspiracy and falsifying books and records of an investment adviser. He said he was “shocked and devastated” when his brother revealed several days before he surrendered that thousands of accounts supposedly worth $65 billion were worthless.
Bernard Madoff became an icon of financial crime in late 2008 when the fraud was revealed just as the financial crisis hit. He was sentenced to 150 years in prison in 2009. The brothers are the only Madoff family members to face criminal charges.
Investigators say Bernard Madoff had distributed most of the $20 billion he took in over several decades to other investors while investing none of it in the markets as he had promised to do.
A court-appointed monitor has so far recovered nearly $9.3 billion that was lost, mostly by clawing back money from investors who received large payouts along the way. Most of the money has not yet been distributed. A small part of the recovery has resulted from the sale of numerous Madoff family assets, including the toys of the wealthy — multi-million dollar homes, fancy cars, yachts and art.
In a pre-sentence brief, attorney John Wing said his client was subject to a “draconian forfeiture order that in one stroke stripped him of all existing assets, his home, his pension, his savings, his personal property, etc. and of all future assets and income should he even have the opportunity to earn any income after serving his prison sentence.” He said Peter Madoff will be left a “jobless pariah” when he gets out of prison.
Yet, one couple who submitted a victim impact statement to federal prosecutors said Peter Madoff did not seem destitute when he was spotted “enjoying a leisurely lunch in an expensive Upper East Side restaurant where many of his victims would like to eat but can’t afford to.”
In the letter filed publically Wednesday with others, Jill and Nancy Miller said they saw him there after he had pleaded guilty in June.
Michael De Vita, an investor who has asked to speak, said in a letter to the court that the judge should set aside the plea agreement and impose the maximum sentence.
“I ask that you show the same degree of compassion for Peter Madoff that he showed for us — none!” he wrote.
Another victim, Gail Oren, said she had to come out of retirement and can only afford rare public outings with friends.
“It is embarrassing,” she said. “My social life is almost non-existent now. As a result, I am often alone and often feel depressed. My life has become a life of loneliness quite often.”
Karl and Wanda Eisenhauer wrote that they were forced to sell their family farm because of their losses.
“It is difficult to describe the heartache. We can only beg for your help,” they said.
Morton J. Chalek recalled standing in line when Pearl Harbor was bombed to enlist in the Air Force. He flew 23 combat missions and later built a successful business before his attorney introduced him to his golf partner, Bernard Madoff.
“I am now 90 years old and bankrupt. I have been waiting hopelessly to recover the money Madoff stole from me,” he said.
Not everyone sounded angry at their loss.
Robert Roman, Peter Madoff’s brother-in-law, said he and his wife, Joan, had lost their life savings, along with the life savings of their three daughters and their families and yet did not wish prison on Peter Madoff.
“Our family is supposed to hate him. But — we do not. Why? Because prison is where Charles Manson belongs. That is a solution to his situation. Peter in prison is an answer only to those who seek revenge. It is not a solution,” he wrote.
Roman said he met the brothers in February 1954 and witnessed firsthand the “domination and back-yard bullying” that Peter Madoff endured at the hands of his brother.
He called Peter Madoff a victim and said the tens of millions of dollars in riches given to Peter by his brother likely corrupted him to give in to his brother’s demands.
“Bernard Madoff had control of the greatest weapon of mass destruction ever created. It was his checkbook. To be seduced by that weapon is the ultimate temptation,” Roman wrote.
Copyright 2012 The Associated Press.