A judge decided today that the accused mastermind of what is allegedly the largest Ponzi scheme in history will remain free on a $10 million bond but will continue to be under house arrest at his posh Manhattan penthouse.
U.S. prosecutors had asked that Madoff be jailed while awaiting trial on a federal fraud charge. U.S. Magistrate Judge Ronald Ellis ruled that Madoff was not a flight risk and did not pose a threat to society.
Prosecutors had requested that his bail be revoked because Madoff had mailed more than $1 million in jewelry and heirlooms to people over the holidays and apparently had written, but not mailed, millions of dollars of checks to people.
The decision is sure to further outrage investors who have been clamoring for Madoff to be sent to jail for allegedly carrying out the largest financial fraud in history. Prosecutors said the gifts were grounds to have his bail revoked because what’s left of Madoff’s assets will have to be returned to burned investors.
According to the report, Madoff’s new bail conditions include an inventory of his personal property and searches of his mail. The judge ruled that federal prosecutors failed to prove their contention that Madoff posed risks sufficient to merit his incarceration pending trial.
The anxiously awaited decision does put further restrictions on Madoff, including forcing him to come up with a list of items at his apartment and allowing a security firm to check on the items. The security company will also be allowed to search all outgoing mail from Madoff to ensure that no property has been transferred.
Madoff did the unthinkable in the Jewish community; he ripped off their own. While it is considered good business to rip off anybody else, Bernie targeted the darlings of Palm Beach. Such was this indiscretion; his own family blew the whistle (after salting away their share offshore) and threw him under the bus. When the front wheels failed to stem the prospect of social ostracism, his family reported his pathetic effort to keep a few watches and other items, like gloves, out of the hands of liquidators and kicked him back under so the back wheels could get him.
The judge is ordering Madoff to list items of value at his apartment as part of his agreement to stay free on bail.
Investors in the $50 billion scheme have been angered that the investment firm owner has been allowed to stay at his $7 million penthouse apartment while many of them have lost everything.
Madoff told FBI agents last month that he had overseen a financial fraud and estimated that it had cost investors as much as $50 billion, according to a criminal complaint filed in federal court in Manhattan.
The fraud was continuing just days before Madoff confessed it to the FBI, according to a lawsuit filed by a New York company that asserts Madoff took in $10 million from it on Dec. 5.
A government-appointed receiver has now taken over his firm, and agents from the Securities and Exchange Commission agents and FBI investigators are conducting a far-flung investigation to see who may have aided Madoff. On Monday, the trustee overseeing the liquidation of Madoff’s firm sent 8,000 claim forms to people who may have invested with Madoff, asking them to detail what they believe they are owed.