Madoff Victims Worry Secrets Will Follow Him to Prison

Dec. 17, 2008: Bernard Madoff, chairman of Madoff Investment Securities, returns to his Manhattan apartment after making a court appearance. (AP)

NEW YORK – Bernard Madoff's expected guilty plea leaves many of his ruined investors worried that the disgraced financier will take his secrets to prison with him.

On the eve of his federal court hearing, key questions remained unanswered: Who helped Madoff run one of the largest investment scams in U.S. history? What happened to the money?

Many of the people ruined by Madoff's Ponzi scheme took little comfort in his day of reckoning, even if it puts him in prison for life.

"A pound of flesh here is really not worth as much as a check," explained Burt Meerow, 70, who saw the proceeds of a lifetime of work vanish. He is now selling his home in Park Ridge, N.J., to stay afloat.

Madoff is scheduled to enter his plea Thursday morning in U.S. District Court in lower Manhattan.

His lawyer has indicated he will admit guilt on all 11 felony counts, which would lead to a sentence of around 150 years under federal guidelines. He would not be formally sentenced for several months.

Since almost the start of the case, the 70-year-old Madoff has been expected to plead guilty. And thousands of people who lost money with him have longed for the day he would be forced to leave his $7 million penthouse apartment, face his victims and be thrown in jail.

But the swiftness of his confession has been greeted with skepticism by his investors, many of whom still believe he has plenty to hide.

Some had hoped that prosecutors would eventually force Madoff to name any accomplices who helped carry out the fraud. Now many investors look at the plea hearing as a setback of sorts because Madoff is entering the plea on his own, without a deal with prosecutors. That means he is under no obligation to disclose names or turn over assets.

His victims are doubtful that the plea will lead to the prosecution of anyone who helped Madoff or the recovery of additional money for the defrauded. Still unclear is how much of Madoff's family fortune might be forfeited to the government, including the penthouse and tens of millions of dollars in assets in his wife's name.

"The fact that he is protecting people is outrageous," said Jeannene Langford, a Madoff victim in San Francisco.

Prosecutors have said they are continuing to examine Madoff's finances and whether any other crimes were committed, either by him or members of his inner circle. Civil authorities and a court-appointed trustee are also searching for assets.

The judge has indicated he is willing to hear from a small sampling of Madoff's victims during the proceeding, but only on two topics: whether the court should accept the guilty plea and whether Madoff's bail should be revoked.

The bail question is one that has burned deeply for wiped-out investors, some of whom have struggled to stay in their homes as Madoff has continued to live in relative luxury under house arrest.

Following the plea, U.S. District Judge Denny Chin could order Madoff taken immediately to a federal detention center in New York, most likely the Metropolitan Correctional Center, a high rise adjacent to the courthouse where inmates in the general population share cells measuring 7 1/2-by-8 feet.

Chin has not said how he intends to rule on the bail issue, but he indicated he would give victims who disagreed with his decision a chance to speak before he makes his order final.

Victims from all over the country have sent e-mails to the court and prosecutors, asking to be heard. But Chin said he would keep a tight rein on the spectacle, limiting the number of speakers and the time and manner in which they are allowed to address the court.

Matt Weinstein, a motivational speaker who, along with his wife, the author Geneen Roth, lost the bulk of their savings in the scheme, said he hoped any victims in attendance would press the judge to revoke Madoff's bail immediately.

"That's what really infuriates everyone," he said. "We know people who have moved in with friends, who can't afford their own homes," Weinstein said.

"People can't even afford rent anymore, and to see him in his penthouse ... He can't go on in this palace of denial."

As for victims who want a chance to confront Madoff about anything other than the bail issue or plea agreement, they may have to wait until sentencing.

Once his sentence becomes formal, Madoff would be transferred to a federal prison, probably a low-security facility for nonviolent offenders.

The possibility that a few of Madoff's investors may get a chance to let him have it in court was tempered for many by the realization that any angry words will be lost on uncaring ears.

"I don't know what I would say to him at this point ... He is just an animal," said Paul Allen, an 89-year-old retiree from Thousand Oaks, Calif., who lost his life savings in the scam. "Would he say he's sorry? I don't think so. I don't think he is sorry. The only thing he's sorry about is that a good thing came to an end."

Sharon W. Lissauer, a New York model who also lost her life savings, said she is convinced that Madoff still has millions or even billions of dollars hidden away somewhere, and wants a chance to beg him to turn over the money.

Authorities have said Madoff confessed to carrying out a $50 billion fraud but experts say the actual loss was probably much less because his purported profits were fictitious.

"I'd just like to ask him to have a heart," Lissauer said. "He's not going to listen to me, I'm sure. But I would just love the chance to plead with him and beg him to try and have a heart and give as much as he can. Because it's all gone, basically everything I had. So I'm really in trouble."