Peter Madoff, the brother of imprisoned swindler Bernard Madoff, is expected to plead guilty to criminal charges on Friday, the first family member to do so since the Ponzi schemer's fraud was uncovered in December 2008.
In a letter filed Wednesday in Manhattan federal court, U.S. Attorney Preet Bharara said Peter Madoff is expected to plead guilty to charges of conspiracy to commit securities fraud and other crimes, as well as falsifying records. He agreed not to seek a sentence other than 10 years in prison.
Madoff, who had been chief compliance officer at Bernard L. Madoff Investment Securities LLC, also agreed to a criminal forfeiture of about $143.1 billion, including all real and personal property, the letter said. The amount is symbolic, being more than twice the estimated size of the fraud.
John Wing, a lawyer for Madoff, did not immediately respond to a request for comment.
Prosecutors have not said whether criminal cases are also being prepared against Bernard Madoff's son, Andrew, who was co-director of trading, or his niece, Shana, who was a compliance officer at the firm.
Both are being sued by Irving Picard, the trustee seeking money for the Ponzi scheme's victims. He has filed a $255 million lawsuit against them and other Madoff family members.
Martin Flumenbaum, a lawyer for Andrew Madoff, did not immediately respond to a request for comment. A lawyer for Shana Madoff could not be identified immediately.
Mark Madoff, another of Bernard Madoff's sons, committed suicide in December 2010.
RIGHT-HAND MAN HAS COOPERATED
Peter Madoff is charged with one count of conspiracy to commit securities fraud and mail fraud as well as making false statements about the firm's compliance program and investment advisory business.
A second charge accuses him of falsifying records of an investment adviser.
About a dozen people have now been implicated in criminal wrongdoing related to Bernard Madoff's former firm.
Five have pleaded not guilty: Annette Bongiorno, Daniel Bonventre, Joann Crupi, Jerome O'Hara and George Perez.
Frank DiPascali, the firm's former chief financial officer and often called Bernard Madoff's right-hand man, pleaded guilty in August 2009 and has been praised by prosecutors for his subsequent cooperation.
DiPascali has yet to be sentenced. His lawyer, Marc Mukasey, declined comment.
Picard has estimated that customers of the Madoff firm lost about $20 billion. On Monday, the U.S. Supreme Court let stand a lower court ruling on the trustee's methods for calculating losses. That decision could help Picard repay customers faster.
A spokeswoman said Picard had no comment on the expected guilty plea.
Bernard Madoff, 74, is serving a 150-year prison sentence after pleading guilty in March 2009. He was ordered to forfeit $170.8 billion.
The case is U.S. v. O'Hara et al, U.S. District Court, Southern District of New York, No. 10-cr-00228.
(Reporting by Basil Katz in New York and Jonathan Stempel in Washington; Editing by Gary Hill, Richard Chang and Leslie Gevirtz)