The guilty plea came exactly three years to the day after Bernie Madoff received the 150-year prison sentence he is currently serving in a North Carolina jail.
In accordance with a plea deal arranged on Friday, Peter Madoff, 66, is likely to serve a comparatively shorter ten-year sentence. He pleaded guilty on one count of conspiracy to commit securities fraud and one count of falsifying records.
At Bernard L. Madoff Investment Securities, Peter served as chief compliance officer. He was the “No. 2 executive” at the firm, according to the Times.
Among the crimes the younger Madoff confessed to last Friday include: dodging taxes on millions in income, adding his wife to the firm’s payroll though she never worked there, and falsifying filings to keep the firm’s operations away from regulatory scrutiny.
Aside from serving an expected ten-year sentence, the plea deal says the Ponzi schemer’s brother must turn over all of his assets. Money from the sales of Peter’s co-op on Manhattan’s Upper East Side, two homes on Long Island, and one in Palm Beach, Florida, and a 1995 Ferrari 355 Spyder will be funneled to the government as it makes every effort to recompense those whose savings and retirements funds were erased in the aftermath of the fraud.
The financier was taken away by authorities while at his lawyer’s office in midtown Manhattan. He acquiesced without a fight, multiple media reported.
Peter Madoff then came close to tears as he apologized for his crimes in the courtroom.
“I am deeply ashamed of my actions,” he said. “I want to apologize to anyone who was harmed and to my family, and I’m here today to take responsibility for my conduct.”
But despite having aided his brother, Bernie, in orchestrating the massive financial crime, Peter testified he was unaware of the Ponzi scheme until days prior to Bernie Madoff’s arrest. The $65 billion fraud had escaped the exec’s attention, Peter said.
“I was in shock, and my world was destroyed,” he testified, explaining his reaction to learning of the fraud, according to the Times. “I always looked up to and admired [Bernie].”
“I truly believed my brother was a brilliant trader,” he added later in the hearing.
Bernie’s brother is the eighth individual and first relative of the elder Madoff’s to plead guilty to charges relating to the Ponzi scheme since an investigation was opened into the financier’s firm in December 2008.
The Madoffs’ financial moves cost thousands billions. Jewish organizations and figures such as Hadassah, the American Jewish Congress, and Elie Wiesel, were among those swindled out of their fortunes and saddled with devastating debts.
Peter’s plea deal still requires a judge’s approval, however. Justice Laura Taylor Swain of the U.S. District Court in Manhattan rendered Peter Madoff free on bail until his October 4 sentencing, but the fallen financier is obligated to stay in the New York metropolitan area and to relinquish his passport to authorities.
Though ten years is sure to make Peter Madoff an old man when finally emerges from behind bars after serving his sentence, some are still concerned he may have gotten off easy. According to the Times, the subject of Peter’s sentence was debated between federal prosecutors and the FBI.
In a statement Friday, the FBI pithily explained the severity of Peter Madoff’s crimes.
“Peter Madoff played an essential enabling role in the largest investment fraud in U.S. history,” Janice K. Fedarcyk, assistant director of the FBI’s New York branch, said in a statement. “He made a pretense of compliance; he was really about complicity.”