June 29, 2009 / 4:16 AM / 8 years ago

Madoff gets 150 years for massive investment fraud

<p>Disgraced financier Bernard Madoff stands during his sentencing hearing in New York in this court artist's sketch completed June 29, 2009.Shepard</p>

NEW YORK (Reuters) - Bernard Madoff was sentenced on Monday to 150 years in prison -- the maximum penalty the judge could give him for "extraordinarily evil" crimes in Wall Street's biggest and most brazen investment fraud.

Fleeced investors in the courtroom cheered and applauded as the judge handed down the penalty.

Madoff, 71, stood passively with his hands clasped at his waist, showing no reaction when he heard the sentence that will send him to prison for the rest of his life.

The former nonexecutive chairman of the Nasdaq stock market has been jailed in a Manhattan cell since he pleaded guilty to 11 charges including securities fraud, money laundering and perjury in March.

"Here the message must be sent that Mr. Madoff's crimes were extraordinarily evil," U.S. District Judge Denny Chin said in rejecting defense pleas for a lenient, 12-year sentence. "The breach of trust was massive.

"I simply do not get the sense that Mr. Madoff has done all that he could or told all that he knows."

The gray-haired money manager was dressed in his signature dark gray suit, white shirt and tie instead of a prison jumpsuit.

The disgraced financier sat passively throughout the hour-and-a-half hearing as his victims called him a "beast," an "animal" and a "lowlife."

He apologized to them, at one point turning toward the 250 people in the courtroom.

"I will live with this pain, with this torment, for the rest of my life," he calmly said. "I live in a tormented state knowing the pain and suffering I have created."

Madoff, who has been accused of bilking investors worldwide out of as much as $65 billion, said, "In my business, when you make a trading error, you're expected to make a trading error, it's accepted. My error was much more serious. I made an error of judgment."

Caught Out by Financial Crisis

Madoff's December arrest came as investors were feeling the brunt of the worst financial crisis since the 1930s Great Depression.

The case has triggered widespread criticism of the U.S. Securities and Exchange Commission, which has been accused of missing red flags that could have brought the curtain down on his asset management business.

It was not known where Madoff will serve his sentence for what prosecutors described as a worldwide fraud of small and wealthy investors, charities and financial institutions.

Judge Chin heard wrenching statements from nine of Madoff's victims, some of whom said they had lost their life savings, were forced to sell their homes, or had to apply for government assistance to buy food.

"I only hope that his prison sentence is long enough so that his jail cell will become his coffin," said Michael Schwartz, 33, who said his family had been robbed of savings earmarked for the care of his mentally disabled brother.

The White House said that the judge had sent a strong signal to those who handle other people's money.

"My guess is that that message will be heard loud and clear," said President Barack Obama's spokesman Robert Gibbs.

<p>Defrauded investor Michael Devito gives the victory sign as he exits United States Courthouse in lower Manhattan June 29, 2009 after the sentencing hearing for convicted swindler Bernard Madoff.Mike Segar</p>

Madoff was arrested in December after his two sons told authorities that he had confessed to them that his investment empire was a sham.

Prosecutors have said that Bernard L. Madoff Investment Securities showed $65 billion in customer accounts weeks before his arrest, but the trustee winding down the firm has so far only been able to collect $1.2 billion to return to investors.

As much as $170 billion flowed through the principle Madoff account over decades. Madoff was symbolically ordered to pay that amount in restitution.

While a much lower sentence would have sent Madoff to prison for life, Chin said he deserved the maximum, typically handed down to organized crime bosses.

"The fraud here was staggering," the judge said.

One law professor said she was surprised by the sentence but uncertain whether it would serve as a deterrent.

Slideshow (10 Images)

"I'd love to think that the mini-Madoffs out there would think that what happened today has something to do with them, but I suspect most of them do not," said Jayne Barnard of the College of William and Mary in Williamsburg, Virginia.

Madoff's lawyer said no decision had been made on whether to appeal the sentence.

None of Madoff's relatives came to court. They have not attended any of his prior court appearances.

The judge said he had not received a single letter on Madoff's behalf, testifying to any good deeds or charitable works. "The absence of such support is telling," Chin said.

Madoff's wife Ruth, 68, has not been charged with any crimes but she has been vilified by defrauded investors, shunned by friends, and pursued by the media. Breaking her long silence, she said in a statement on Monday that she had been "betrayed and confused" by her husband's scam.

"From the moment I learned from my husband that he had committed an enormous fraud, I have had two thoughts -- first, that so many people who trusted him would be ruined financially and emotionally, and, second, that my life with the man I have known for over 50 years was over," she said.

Madoff has said he acted alone. The only other person charged criminally is his outside accountant.

Madoff's brother, Peter, and his sons, Mark and Andrew, were executives in his firm's brokerage unit. They have said that they were not aware of or involved in the crooked asset management side.

Madoff and his wife have agreed to the sale of three luxury properties and other assets and valuables. Proceeds from asset sales will be distributed to defrauded investors.

Ruth Madoff will be left with $2.5 million, after forfeiting claim to some $80 million in assets including the couple's Manhattan penthouse apartment.

Madoff told investors in the courtroom that he could offer no excuses, saying he tried to undo his crimes but "the harder I tried, the deeper a hole I dug for myself."

Investors said the apologies left them cold.

"There's something very pathological. He is still making excuses for himself," said George Nierenberg, 57.

Reporting by Grant McCool, Martha Graybow, Daniel Trotta, Mike Erman and Christine Kearney; Editing by John Wallace, Toni Reinhold

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