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Madoff's brother to plead guilty to fraud

world Updated: Jun 28, 2012 09:43 IST
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The brother of shamed financier Bernard Madoff will plead guilty to two charges of fraud and faces a 10-year jail term, US federal prosecutors said on Wednesday.

Peter Madoff, who was senior managing director for his brother's investment scheme, will plead guilty on Friday in a Manhattan court to securities fraud, false declarations and falsifying documents, US attorney Preet Bharara said.

"The government expects that at a court appearance scheduled for June 29... that Peter Madoff... will plead guilty," Bharara said in a letter to judge Laura Taylor Swain.

"Pursuant to a plea agreement with the government, Peter Madoff agrees not to seek a sentence other than 10 years imprisonment," he added.

Each count carries a statutory maximum sentence of 10 years.

Madoff also agreed to hand over property and belongings worth $143.1 billion. The prosecutor's office, contacted by AFP to explain the huge sum, confirmed the amount, but was not able to explain what it consisted of.

Bernard Madoff, a charismatic mogul and once chairman of the Nasdaq stock exchange, fooled charities, major banks, Hollywood moguls and savvy financial players into investing in his massive Ponzi investment scheme.

He took in some $65 billion from thousands of clients over decades, building a reputation as a shrewd investment manager by paying out fake "profits" to some investors by plundering the new cash from others.

But his pyramid scheme collapsed in 2008, wiping out numerous family fortunes. He was arrested in December that year, and pleaded guilty in 2009.

Bernard Madoff is currently serving 150 years in a North Carolina jail where he earns $170 a month for prison work.

So far liquidators have recovered or reached deals to recover $9.13 billion of the money that was lost, but most of that remains locked up in court procedures and challenges.

Liquidator Irving Picard, a New York attorney in charge of recovering the monies, said in a report in May that only $330 million has been returned to victims.

Investors' real losses are estimated at around $17.3 billion, while the lawyers' fees have eaten up $554 million.