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Victims worry Madoff will take secrets to prison

business Updated: Mar 12, 2009 12:10 IST

AP
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Disgraced financier Bernard Madoff is expected to plead guilty on Thursday to charges related to running a massive pyramid scheme. But many of his ruined investors aren't pleased; they worry that he 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 US history? What happened to the money? Many of the people ruined by Madoff's 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 New Jersey to stay afloat.

Madoff is scheduled to enter his plea on Thursday morning in US 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, US District Judge Denny Chin could order Madoff taken immediately to a federal detention center in New York. 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. 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, California, 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."