Despite all that’s been written about Bernard L. Madoff (and God knows we’re talking volumes), Bernie remains a mystery. Yes, we know his pants cost $2,000, he decorated his London and New York City offices the same way, and we even know the exact location of his many homes and his New York Mets tickets. It sometimes seems to me though, the more that is written about him, the less we know. To me, Bernie Madoff remains a mystery.
“The pressure on his family was reduced the moment Madoff went to jail.”
What we don’t know is far more important than what we do. We don’t know where the billions of dollars are hidden, who else was complicit in history’s biggest scam, or whether he originally started the business as a legitimate enterprise. But for me the question I keep asking is, Why did Bernie Madoff plead guilty months ago rather than bide his time in a comfortable penthouse?
All of us—investors, the public, the press—were so relieved when Madoff was carted off to prison that none of us asked the obvious question: Why is Madoff allowing this to happen to him? Ira Sorkin, a highly reputable attorney representing Madoff, must have told him that were he to plead guilty, he was taking a significant risk that his bail would be revoked, and he might be incarcerated in a tiny cell where he would eat and defecate under a 23-hour lockdown. So why did then-70-year-old Madoff race off to jail for the rest of his life rather than stall the judicial process? What was in it for him? One thing we do know about Madoff is he is no fool, not impulsive, and certainly not altruistic. So why did he do it?
To get an answer to this question, I contacted three people who are eminently qualified to speculate—two former high-ranking members of the Justice Department and a former federal judge. All three are in private practice and all have represented white-collar criminals. Because the Madoff investigation is ongoing, their comments are not for attribution.
The first attorney does not understand why Madoff made his decision, “As soon as he chose to plead guilty, the burden switched to him to stay out of jail. He could probably have delayed trial for up to a year and at any time he was always free to plead guilty. It makes no sense to me.”
The second lawyer believes that even though the U.S. attorney publicly stated there were no deals made, and the representation was confirmed in open court by Judge Denny Chin, “there are frequently informal understandings between the prosecutors and the defense team. It wouldn’t surprise me if there were some kind of informal understanding that if, as example, Mrs. Madoff were not convicted, the government would not confiscate all her money.”
The former federal judge also felt Madoff went to prison in order to help his family. “It wasn’t that great a sacrifice because he would not have been able to delay a trial for up to a year,” the judge said, differing from the former Justice Department official. “The public pressure was such that a trial probably would have taken place within a few months. Since the FBI visited Madoff in December, it’s all been about his protecting his family. The pressure on his family was reduced the moment Madoff went to jail. Just look at the news. The anger has subsided and the pressure on the government to go after his family is not what it was a couple of months ago.”
As Madoff awaits a life sentence tomorrow, it remains to be seen whether his early jail time saved his family. We will learn the answer later this year.
Burt Ross, former mayor of Fort Lee, New Jersey, and former administrator of the New Jersey Energy Office, is a lawyer and real-estate investor. A book The Bribe was written about his exploits with the Mafia.