An apologetic Madoff goes to jail

Admits to massive Ponzi scheme, awaits many-year sentence

NEW YORK - Pleading guilty to orchestrating the largest fraud in Wall Street history, Bernard L. Madoff said yesterday he was "deeply sorry and ashamed" for his crimes, before being led out of a packed Manhattan courtroom in handcuffs.

US District Judge Denny Chin revoked Madoff's bail and ordered that he be sent to jail to await sentencing, saying he was a flight risk because of his age and wealth. Madoff, 70, faces life in prison, up to 150 years, and is scheduled to be sentenced on June 16.

In his first public comments about his crimes since he was arrested Dec. 11, Madoff, in a dark gray suit and speaking in a soft, husky voice, admitted to 11 charges. When the judge asked if Madoff understood he was under oath, Madoff broke into a brief coughing fit, then replied, "Yes."

"Try and keep your voice up so I can hear you," Chin said. The judge read the charges, including fraud, perjury, and money laundering. "Guilty," Madoff responded.

Later, Madoff read from a six-page statement in which he revealed the scope of his deception - a scheme that cost duped investors billions of dollars. Madoff said he knew what he was doing was wrong, and criminal.

"When I began the Ponzi scheme, I believed it would end shortly and I would be able to extricate myself and my clients," he said. But that ended up being impossible, he said, "and as the years went by, I realized that my arrest and this day would inevitably come."

Madoff said his fraud began in the early 1990s "to the best of my recollection," amid a recession and bad times for the stock market. He said he solicited money from current and new clients, with promises to invest in stocks and options of well-known companies.

But in reality, he never invested the funds, instead depositing them in an account at Chase Manhattan Bank. When people wanted to withdraw funds, he simply took money out of the bank account, he said. Prosecutors have said Madoff's fraud dated back to the 1980s.

"I felt compelled to satisfy my clients' expectations at any cost," Madoff said.

Three of Madoff's victims spoke before the courtroom. One, George Nierenberg, addressed Madoff directly. "I don't know if you had a chance to turn and look at the victims," said Nierenberg, standing at a podium diagonally behind the disgraced financier.

Madoff casually turned his head and glanced back, his expression blank. The judge repeatedly called Nierenberg's name, directing him to address the bench and not Madoff. Nierenberg ended his statement by questioning why Madoff was not charged with a conspiracy count, arguing that the former Wall Street tycoon was often away from his office. "Who handled it when he was gone?" Nierenberg asked. "What I'm suggesting is that there was an additional crime that was committed."

Indeed, even as victims got to see Madoff sent to jail, many complained that the government has yet to charge others in a crime that almost certainly could not have been committed by one person. By pleading guilty, Madoff relieved himself of any duty to cooperate with investigators and to give up the names of others who may have been involved in the Ponzi scheme.

Saphira Linden, artistic director at the Omega Theater in Jamaica Plain, which lost all of its endowment with Madoff, said she, like other victims, was concerned about getting any money back. "By not making him talk about where the other assets are, that's definitely a problem," she said.

Lawrence Velvel, dean of the Massachusetts School of Law and a Madoff investor who has become a vociferous advocate for victims, wrote to Judge Chin on Tuesday, asking him not to sentence Madoff until the government had proven that it had exhausted every possible avenue for recovering victims' assets.

George Jackson, a Chicago attorney and a former assistant US attorney, said in an interview that the government could call Madoff to testify in any cases it brings against others in the scandal. Once his prosecution is completed and he is sentenced, he technically will not have a right to invoke the Fifth Amendment to protect himself from self-incrimination. But he has nothing to gain for his testimony, Jackson said.

"You don't know what you're going to get. He could lie," Jackson said. "If he commits perjury, what's he going to get, extra time in jail? He's going to be in jail for the rest of his natural life."

Victims among the more than 100 spectators crammed into the courtroom on the 24th floor of the federal courthouse in Lower Manhattan burst into applause after the judge said Madoff would go directly to jail. Some cheered. A marshal immediately handcuffed Madoff, who momentarily appeared close to losing his balance as he was led away. His expression was grave, but he did not speak or turn to his attorney.

"What a sweet sight, what a sweet sight," said Miriam Siegman, 65, a Madoff investor from New York City who said she lost "everything, penny by penny" - more than $2 million.

In Boston, the Carl and Ruth Shapiro Family Foundation, which lost about $145 million, or nearly half of its assets to Madoff, had no comment on his guilty plea. A spokesman for Robert Jaffe, a Boston broker who helped raise money for Madoff, said Jaffe had no comment.

Madoff's attorney, Ira Sorkin, had argued that the chance of his client fleeing was "nil." Sorkin described intense video monitoring in Madoff's apartment, noting the monitoring device on his ankle. He mentioned a "panic button" that he said could be used by the authorities if there were any suspicion of flight. He also said that all outgoing mail and packages are inspected by a security firm that is paid "at his wife's own expense."

That brought loud laughter from the spectators. The judge immediately called for silence.

Sorkin said he would appeal the judge's order revoking Madoff's bail.

In addition to prison time, Chin said, Madoff faces mandatory restitution to victims, the forfeiture of ill-gotten gains, and criminal fines.

Beth Healy can be reached at bhealy@globe.com.