Ponzi scheme mastermind Madoff says he's terminally ill and asks for early release

He carried out the largest fraudulent investing scam in history and is serving a 150-year prison sentence

Ponzi scheme mastermind Bernie Madoff exits court in New York. Madoff asked a federal judge to grant him a “compassionate release” from his 150-year prison sentence, saying he has terminal kidney failure and less than 18 months to live. AP
Ponzi scheme mastermind Bernie Madoff exits court in New York. Madoff asked a federal judge to grant him a “compassionate release” from his 150-year prison sentence, saying he has terminal kidney failure and less than 18 months to live. AP

Bernard Madoff, who defrauded investors of more than $19 billion (Dh70bn) in history’s biggest Ponzi scheme, has asked for early release from his 150-year prison sentence, saying he has 18 months left to live.

Madoff, 81, asked US Circuit Judge Denny Chin to release him after serving only 10 years, saying he suffers from terminal kidney failure and other ailments.

His lawyer, Brandon Sample, said in a court filing Madoff has “chronic kidney failure that has progressed to end-stage renal disease". Madoff also suffers from other conditions, including heart disease, high blood pressure, esophageal reflux, insomnia, shortness of breath, back pain, itching, leg cramps and anxiety, according to the filing.

“Madoff humbly asks this court for a modicum of compassion,” Mr Sample said in papers filed in Manhattan federal court on Wednesday.

Early release for Madoff could outrage many of his victims. Investors lost $19bn in principal when Madoff’s securities company collapsed in December 2008. His victims included thousands of wealthy investors, Jewish charities, celebrities and retirees.

“He showed no remorse whatsoever for what he did, so why should we?” asked Gregg Felsen, a Madoff victim who lives in Palm Springs, California. “His crime was horrendous.”

If granted, an order freeing Madoff would come on the heels of one granted to former WorldCom chief executive Bernard Ebbers in December for medical reasons. Ebbers, who was convicted in 2005 of securities fraud following WorldCom’s collapse, served more than 13 years of a 25-year sentence. He died on February 2 at age 78.

Madoff built a reputation over three decades as a brilliant stock-picker who delivered uncannily steady returns in good markets and bad. But his results were largely fictitious, and he told his family in December 2009 that the business was “all just one big lie". Madoff’s two sons turned him in to the Federal Bureau of Investigation. One of his sons later committed suicide while the other died of cancer.

The scheme unravelled in 2008 when the economic crisis led to more withdrawals than Madoff could afford to pay out. Some clients learnt they lost their life savings after Madoff’s confession and arrest on December 11 of that year.

Judge Chin sentenced him to 150 years behind bars after the con man pleaded guilty in 2009.

“This was not merely a bloodless financial crime that occurred on paper, but one that takes a staggering toll,” Judge Chin said at the time. “The breach of trust here was massive.”

Robin Swernoff, of Bayside, Wisconsin, urged Judge Chin in a 2009 sentencing letter to confine Madoff for the rest of his life for stealing from so many people, including her mother and father. She has nit changed her mind. Ms Swernoff says she believes the shock exacerbated her father’s health problems.

“He probably died earlier than he would have,” Ms Swernoff says. “My mother is down to nothing.” “I think he should rot in jail until he’s ready to rot in hell,” she says.

In July, Madoff asked President Donald Trump to commute his sentence. Legal experts at the time largely dismissed the possibility that his request would be granted, given the magnitude of his crime.

“While I would never wish dying in jail on anyone, it is hard to imagine a less sympathetic non-violent offender than Bernard Madoff,” says Matthew Schwartz, a former federal prosecutor on the con man’s case who is now at Boies Schiller Flexner. “His tens of thousands of victims still continue to feel the profound and devastating harm from his decades-long fraud to this day.”

A trustee appointed to recover money for Madoff’s victims says they have been repaid about $12.9bn, as of January 24.

Madoff is seeking early release under the he 2018 First Step Act, which allows some federal inmates who are more than 60 years old, or who face terminal illnesses, to serve the end of their sentences at home. Ebbers was released under the same law.

In July, Raj Rajaratnam, co-founder of Galleon Group and the mastermind of what prosecutors said was one of the largest hedge-fund insider-trading rings in US history, was released two years early under the First Step law. Rajaratnam, 62, served nine years in prison.

Madoff is serving his time at a federal medical centre in Butner, North Carolina.

Updated: February 6, 2020 01:15 PM

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