Madoff Repents in Park Avenue Leisure, Freedom:
Commentary by Ann Woolner
Dec. 22 (Bloomberg) -- Even as charities, funds and investors were tallying the financial devastation in his wake, Bernard Madoff strolled down Lexington Avenue last week, his half-smiling countenance plastered on the front of the New York Times.
Why is this man not behind bars?
Madoff has admitted to pulling off a $50 billion scam perpetrated on people who trusted him, even loved him. He took his own son for millions of dollars. He hurt hospitals, universities and banks around the world. Groups dedicated to criminal justice, ethnic tolerance, medical research, helping the poor, education -- all were his victims.
The sums make the Enron and WorldCom scandals look like mere bumps in the road. In his own words to his sons, he pulled off a “giant Ponzi scheme,” a “big lie.”
So why is this man out and about?
It isn’t hard to understand why Madoff, a much beloved man just a couple of weeks ago, couldn’t find four people to co-sign his bond. Not even his two sons, who turned him in after he confessed to them, would put whatever assets they may have on the line for dear old dad.
Whether they balked because he has left them without assets, or whether he has destroyed all trust in him, or whether they simply wouldn’t lift a finger to keep the man who betrayed them out of jail, who knows?
Collateral Pledge
In any case, prosecutors relented on their insistence that he find co-signers for a $10 million bond. They accepted as collateral for his pledge to appear in court his Upper East Side apartment, his home in Montauk, New York, and the one in Palm Beach, Florida.
These homes, as well as every single piece of property, bank or trading account, car, boat or item of jewelry that Madoff or his firm controlled is now frozen, anyway, no doubt to be seized by the government.
While accepting the houses to secure the bond, the judge imposed new limits on Madoff’s freedoms, more to protect him from harm than to prevent him from harming.
He has to get back to his apartment at E. 64th St. and Park Avenue by 7 p.m. and stay there at least until 9 a.m. He and his wife, Ruth, have both turned over their passports.
House Arrest
He is, in the vernacular, under house arrest, complete with electronic surveillance.
Whether imposed to protect him or others, house arrest “really is the most severe type of pretrial confinement a judge can impose, short of holding somebody in jail,” says Robert Mintz, former federal prosecutor and how a white-collar criminal defense lawyer at McCarter & English in Newark, New Jersey.
So, what’s wrong with jail?
County jails across the country bulge with petty criminals who can’t even make even $10,000 bail much less $10 million. These are people whose sphere of harm looks like a piece of sand compared with Madoff’s universe.
But then, the point of bail isn’t to punish, as much as we may wish it otherwise. It’s to protect the rest of us against further injury and insure that the accused will show up for court dates.
“Absent a threat of harming others, either because the defendant may be violent or involved in drugs, the only real question the judge has to satisfy for themselves is that the defendant will be back in court at all future proceedings,” Mintz says.
Financial Threat
Madoff’s threat to others isn’t physical or pharmaceutical, but financial. And thanks to his confession and the international headlines, surely no one would be stupid enough to fall prey to him again.
As for showing up in court, Madoff had his chance to flee. Before anyone knew what he had done, while he still had a passport and a bank account, he could have fled to sanctuary. He wouldn’t have been the first fugitive financier. Among the more famous: President Richard Nixon’s friend, Robert Vesco, and President Bill Clinton’s most notorious pardon recipient, Marc Rich.
At 70, Madoff surely knew his choices were to either live the rest of his life in exile, or in prison.
When he told his sons that his whole financial life had been a charade, he also told them he had planned to turn himself in, just as soon as he distributed a few more millions to family and friends.
His sons gave him no chance. They called in the feds.
And when FBI agents knocked at his door and invited him to offer “an innocent explanation,” Madoff attempted no cover-up.
‘No Innocent Explanation’
“There is no innocent explanation,” he said, according to an FBI complaint. He said he expected to go to jail.
Well, he isn’t there yet. Until he pleads guilty or gets convicted, until he is sentenced, Madoff will be living on Manhattan’s Upper East Side.
As for his strolling down Lexington Avenue, the swarm of photographers took his picture as he came or went to a courthouse appearance.
He was doing exactly what he needed to do to make sure he’d be allowed to walk about a semi-free man.
Punishment for his alleged crimes will have to wait.
(Ann Woolner is a Bloomberg news columnist. The opinions expressed are her own.)
To contact the writer of this column: Ann Woolner in Atlanta at awoolner@bloomberg.net.
Last Updated: December 22, 2008 00:03 EST |
