When the Bernie Madoff case came to light, 13 other people also were charged with participating in his fraud scheme. One person allegedly involved was his own brother, Peter Madoff, the executive who was second in charge at Bernard L. Madoff Securities.
Peter Madoff has entered a guilty plea after being accused of participating in his brother’s Ponzi scheme, a fraud allegedly perpetrated against innocent investors. He admitted to non-payment of taxes on his multi-million dollar income, and that he listed his wife on Madoff’s firm’s payroll despite the fact that she never did work there. He admitted to filing false papers with securities regulators, but he continued to deny knowledge of the $65 billion fraud scheme his brother Bernard Madoff had created, even though he had worked closely with his brother for over 40 years.
As part of his plea deal, the 66-year-old Madoff accepts a 10-year prison sentence and forfeiture of all of his assets, pending approval by a judge at the upcoming October 4th sentencing. He acknowledged that he failed to properly oversee the investment activities of his brother, as he should have, given his position as Bernard Madoff’s chief legal and compliance officer. Peter Madoff trusted and believed in his brother, just as investors believed their $20 billion investments had grown to $65 billion just prior to disclosure of the scheme’s demise. Bernard Madoff, 74, is serving a 150-year sentence in prison.
Many investors, including his immediate family members, were harmed by this investment fraud scheme and lost their entire life savings. The only recourse investors in this type of fraudulent scheme have is to take legal action to have the courts seize assets from those committing fraud. So far, approximately $9.1 billion has been recovered, with over $1.1 billion distributed to about 4000 victims of Madoff’s scheme.
Source: New York Times, “In Guilty Plea, Peter Madoff Says He Didn’t Know About the Fraud,” Peter Lattman and Ben Protess, June 29, 2012