Peter Madoff pleaded guilty today to conspiracy to commit securities fraud, tax fraud and falsifying records among other charges, but notably, said he was not in on the Ponzi scheme that landed his brother Bernie a 150-year prison sentence. Per documents provided by the office of Preet Bharara, U.S. Attorney for the Southern District of New York, Peter Madoff did confess to such colorful crimes as:
signing fictitious investment advisory reviews with different pens to conceal that he’d completed the documents in one sitting;
knowingly withholding documents requested by the Securities and Exchange Committee;
avoiding taxes on $40 million paid to him by the firm; and
asserting that the firm had $17.1 billion in assets under management when (on paper!) it was managing more than $65 billion.
“Peter Madoff enabled the largest fraud in human history,” Mr. Bharara said. “He will now be jailed well into old age, and he will forfeit virtually every penny he has.”
The government is likely to view Peter Madoff’s plea as a stepping stone to future prosecutions, Michael Weinstein, chair of the white collar practice at Cole, Schotz, told The Observer. “Anyone who might have known about or participated in the fraud or turned a blind eye—the government is going to pursue this until they’re convinced they’re at the very end of the road. It doesn’t allow for perfect closure, but there’s political and public pressure not to close up shop too early.”
UPDATE: When news broke that Peter Madoff would plead guilty broke earlier in the week, The Observer fixed on the government’s assertion that the convict would forfeit $143.1 billion, a sum great enough to make him the world’s richest person twice over. That figure was merely symbolic, amounting to the assets that flowed into and out of the fraudulent fund, and serving as a promise that Mr. Madoff would turn over all of his assets.
Still, we were eager to learn just what Mr. Madoff would be forking over in the deal, and now we know: According to the U.S. Attorney’s office, the plea requires forfeiture of several homes, a Ferrari, more than $10 million in cash securities, and all assets belonging to Mr. Madoff, his wife Marion and daughter Shana. The deal lets Marion Madoff keep about $771,000. Forfeited assets will be used to compensate victims of Bernie Madoff’s scheme.