Madoff Guilty Plea Expected Next Week

By: Larry Neumeister, Associated Press Email
By: Larry Neumeister, Associated Press Email

NEW YORK (AP) - Bernard Madoff is expected to plead guilty next
week to charges that he carried out one of the biggest financial
frauds in history, a person close to the case said Friday.

Madoff, 70, is waiving his right to have a grand jury hear the
government's case against him, agreeing instead to be charged
directly by prosecutors, a step defendants take when they are
preparing to plead guilty in a case. A plea hearing is scheduled
for Thursday.

Late Friday, U.S. District Judge Denny Chin called on potential
victims who wish to be heard at the hearing to notify the court a
day earlier. Madoff could enter a guilty or not guilty plea,
depending on whether he has reached a plea deal with the
government.

But a person close to the case, who spoke on condition of
anonymity because the plea has not yet occurred, said Madoff was
expected to plead guilty.

Chin invited victims to address the court after prosecutors
submitted papers noting that crime victims have the right to be
"reasonably heard at any public proceeding in the district court
involving release, plea, sentencing, or any parole proceeding."

A potential plea deal could mark an important step toward
answering the vexing questions about how Madoff carried out his
sweeping scheme he is accused of orchestrating and who else may
have been involved. Prosecutors say he masterminded a fraud that
has wiped out investors' life savings around the world.

The U.S. attorney's office first suggested Friday that a plea
was imminent when it filed a brief court document indicating Madoff
was ready to waive an indictment. One of Madoff's lawyers said he
had already done so. A waiver of indictment is a necessary
procedural step before a defendant enters a guilty plea.

Prosecutors have a deadline of March 13 to bring an indictment
against Madoff under the speedy-trials law.

The filing was the latest sign pointing toward a possible plea
deal with Madoff, who has been confined to his Manhattan penthouse
since his arrest after authorities said he told his family that he
had engaged in a $50 billion fraud. Authorities have since said
money lost by investors is far less than $50 billion.

Madoff has never contested the allegations and recently
surrendered millions of dollars in major assets, actions that
typically precede plea deals.

The legal developments came as a financial organization in
charge of reimbursing Madoff investors said it sent out the first
checks to victims Friday, Stephen Harbeck of the Securities
Investor Protection Corp. told The Associated Press.

SIPC is an industry-funded organization that steps in when a
brokerage firm fails. It has been helping process hundreds of
claims by investors hoping to recoup losses.

Investors are eligible for up to $500,000 from the organization,
and have until July to file claims. Harbeck would not disclose how
much money was sent to the first investors to get checks, but he
said they deposited cash and never made a withdrawal, making the
forensic accounting very simple.

Harbeck said he did not expect any plea deal to affect the
organization's work.

"We will go about our business regardless of what happens on
the criminal side," he said.

Daniel J. Horwitz, a Madoff defense lawyer, would say only,
"We've waived the right to indictment, and the case will proceed
by information."

Typically, a defendant is brought before a judge, waives
indictment and enters a guilty plea the same day to a charging
document known as an "information." It resembles an indictment
but is brought by prosecutors rather than a grand jury.

Prosecutors' spokeswoman Rebekah Carmichael declined to comment.

Matthew Fishbein, a former chief of the criminal division in the
federal prosecutor's office in Manhattan who is now in private
practice, said a waiver of indictment is often followed quickly by
a guilty plea, but it does not have to occur immediately.

Madoff has already begun relinquishing his assets, something he
might not do if he planned to fight the charges.

He already has surrendered rights to his business and any of the
assets held by the business. A trustee overseeing his assets said
he has identified nearly $1 billion in assets that are available to
reimburse investors who have lost money over the last five decades.

Shortly after his arrest, Madoff offered to relinquish many of
his and his wife's assets, including properties in Palm Beach,
Fla., and France, as well as his boats and cars.

The lawyers, however, have indicated in court documents that
Madoff's $7 million Manhattan penthouse and an additional $62
million in assets should not be taken from the family because they
are in his wife's name and did not result from any alleged fraud.


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