Madoff brother to plead guilty
The brother convicted fraudster Bernard Madoff says he will plead guilty to criminal charges.
Peter Madoff, 66, told a judge he is "deeply ashamed and terribly sorry." But he said he did not know about the epic scam until his brother revealed it in December 2008. The Madoffs' company was once believed to be the world's largest hedge fund. In reality, it was a fraud that ripped off thousands of high-profile clients for up to 20 billion dollars (£12.8 billion).
Bernard Madoff was sentenced to 150 years in prison in 2009 for cheating thousands of people out of billions of dollars. The brothers are the only Madoff family members to face criminal charges.
Peter Madoff is agreeing to serve 10 years in prison for conspiracy and falsifying records and surrender his assets. Court papers charge him with concealing the fraud by signing off on regulatory documents claiming the business was legitimate. He told the Manhattan judge he was in shock when he learned of the fraud and that he lost everything he worked for.
The government has used the co-operation of six former employees and associates of the Bernard L. Madoff Investment Securities LLC to learn what went on inside the secretive business which bogus financial statements claimed held 65 billion dollars (£41.5 billion) in assets.
Peter Madoff kept firmly behind the scenes as Bernard Madoff provided the face of the investment firm that attracted rich and famous clients with too-good-to-be-true returns. In his 2009 guilty plea, Bernie Madoff maintained that his brother had nothing to do with it - and for more than three years, his brother agreed.
Peter Madoff was the firm's top technocrat. He was credited with creating a computer trading system for the firm in the late 1970s and early 1980s that was considered groundbreaking at the time. He ran the daily trading operation, while his brother focused on the more secretive investment advisory arm.
A complaint filed in bankruptcy court by a court-appointed trustee alleged that the Madoff investment business had transferred more than 77 million dollars (£49 million) to Peter Madoff. It said that between 1993 and 2008, he was paid a total of 36 million dollars (£23 million) in salary and bonuses.
Given Peter Madoff's "level of financial experience and sophistication," the trustee alleged that he either knew or should have known that he reaped gains "derived from purported transactions grounded in fraud and deception."
Defence lawyers called the complaint "a sensationalistic attempt to lump together members of the Madoff family and create liability by association." Their court papers claimed the scandal has "left Peter Madoff mired in litigation, and has devastated his family emotionally and financially."