Madoff charged

Bernard Madoff, the New York money manager behind an alleged $50bn Ponzi scheme, has been charged in a Manhattan federal court.

The charges include: securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the United States Securities and Exchange Commission (SEC), and theft from an employee benefit plan.

There is no plea agreement between the government and the defendant.

If found guilty of all counts, Madoff, who is 70, faces a maximum sentence of 150 years in jail.

He is also subject to mandatory restitution and faces fines up to twice the gross gain or loss derived from the offense—which is allegedly $50bn.

‘The charges reflect an extraordinary array of crimes committed by Bernard Madoff for over twenty years. While the alleged crimes are not novel, the size and scope of Mr. Madoff's fraud are unprecedented.’ said Acting United States Attorney Lev Dassin.

He added: ‘The filing of these charges does not end the matter. Our investigation is continuing.’

Madoff is expected to appear at a plea proceeding on March 12, 2009, before United States District Judge Denny Chin in Manhattan federal court.

“While the alleged crimes are not novel, the size and scope of Mr. Madoff's fraud are unprecedented.

Acting United States Attorney Lev Dassin

The authorities allege that:

From at least the 1980s until his arrest on December 11, 2008, Madoff perpetrated a scheme to defraud his clients by soliciting billions of dollars of funds under false pretences, failing to invest investors' funds as promised, and misappropriating and converting investors' funds to his own benefit.

Madoff operated a massive Ponzi scheme in which client funds were misappropriated and converted for his own and others personal use.

He promised certain clients annual returns of up to 46 % per year.

In fact Madoff used most of the investors' funds to meet the periodic redemption requests of other investors.

He is also accused of hiring numerous employees—many of whom had little or no prior pertinent training or experience in the securities industry—to serve as a 'back office' for this investment advisory business. He directed those employees to communicate with clients and generate false and fraudulent documents.

The prosecution also accused Madoff of withholding information from regulators and repeatedly liying to the SEC in written submissions and in sworn testimony.

As of November 30, 2008, Bernard Madoff Investment Securities had approximately 4,800 client accounts. On December 1, 2008, the firms account statements for the calendar month of November 2008 reporting that those client accounts held a total balance of approximately $64.8bn. In fact, according to the prosecution, it held only a small fraction of that money.