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Bernard Madoff, the man who swindled thousands out of $65 billion, plead guilty to 11 criminal charges on March 12th and was sent to jail. Others are being investigated, but no charges have been filed.

Thursday morning, Bernie Madoff appeared in front of U.S. District Judge Denny Chin and plead guilty to his $65 billion Ponzi scheme. As victims looked on from the gallery, he apologized for his wrongdoing explaining "as years went by, [he] realized [his] arrest and this day would inevitably come." One by one, Madoff plead guilty to 11 criminal charges:

• Securities Fraud
• Investment Advisor Fraud
• Mail Fraud
• Wire Fraud
• International Money Laundering to Promote Specified Unlawful Activity
• International Money Laundering to Conceal and Disguise the Proceeds of Specified Unlawful Activity
• Money Laundering
• False Statements
• Perjury
• Making a False Filing with the SEC
• Theft from an Employee Benefit Plan

The 70-year-old faces 150 years in prison for the charges.

In his apology, he maintained that his brother and sons had no role in the scheme and explained that he began getting results for his clients "at any cost" in the early 90's, during poor economic times. After months of investigation, however, SEC officials believe he began the scheme in the 80's.

Earlier in the week Madoff refused to agree to a plea deal with prosecutors and admit to conspiracy, implicating others. Because of his refusal investigators will have no help in identifying others involved in the scheme. According to Dr. Michael Welner, forensic psychiatrist, "the old man falls on his sword" attempting to take the blame for all and save the others involved in the fraud.

Madoff's attorney asked that he be put back on house arrest, but Judge Chin sent him straight to jail saying "he has the incentive to flee" and "the means to flee." SEC officials have located an estimated $950 million of Madoff's assets and continue to search for other funds they are sure he has hidden.

Prosecutors want Madoff to pay $170 billion in restitution to satisfy the 5,000 clients and 13,567 accounts he defrauded.

Ponzi Scheme Attorneys

Getting through the tough financial road that follows after being duped by an investment fraudster can be extremely difficult. Our team of securities attorneys has helped many people get back on their feet in the wake of an investment fraud emotionally and financially.

If you have lost money due to Bernie Madoff's Ponzi scheme or any other investment fraud, contact a securities attorney at Arnold & Itkin LLP for a free evaluation of your case.

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When you look back at 2008, ending with the Madoff investment fraud, it is not surprising that securities attorneys had a busy year. Considering 2009's big start with the Stanford financial fraud exposed, it looks like this years numbers may not be far behind.

A total of 210 securities class action lawsuits were filed last year, of these, 103 were filed against the financial services sector. That is a huge increase from the annual average of 26 lawsuits filed in previous years. According to Business Insurance, contrary what you might expect, most of these lawsuits were not filed in the latter half of 2008, when the extent of the credit crisis became clear. Rather, most of the cases were filed in the first half of the year, before the words "Bernie Madoff" and "investment fraud" became such a familiar part of our lexicon. The reason for this is that most of the biggest firms involved in the credit crisis, had lawsuits filed against them in the beginning of the year. In fact, according to Cornerstone Research of Boston, 9 of the 10 biggest financial firms were sued before December 2008. This was before the Bernard Madoff investment fraud came to light. 18 cases against him were filed in January.

The average securities class action settlement in 2008 was down to $7.5 million from $9.4 million the previous year. However, the percentage of settlements in excess of $100 million increased to 8% in 2008, from 6% in 2005. It’s been a bad year for banks, who are not only besieged by large numbers of class action lawsuits, but are also struggling to survive. Of the 25 banks that collapsed in 2008, five have been sued.

Securities Attorneys

It is impossible for insurance companies, investors and investment fraud lawyers to predict frauds like Madoff's scheme, or the Stanford Financial CD bubble that recently burst. Scams like these are being exposed at an alarming rate and with months or years to go before the credit squeeze is expected to slacken, we can anticipate more frauds coming to light.

If you have lost money in the Bernard Madoff scam or the Stanford Financial Group fraud , contact a securities attorney at Arnold & Itkin LLP to discuss your case.

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It's said to be one of the, if not the, biggest investment fraud scandals on Wall Street. As the dust begins to clear around Bernard L. Madoff's audacious multi-billion dollar Ponzi scheme, investors, investigators, and securities attorneys are wondering how they failed to spot the signs of the scam of the century.

The scam, which has already inspired some wry humor– "Madoff 'made off' with my money"–  is no laughing matter and has insiders worried that the giant Ponzi scheme that Madoff was allegedly operating could have major repercussions on hedge fund companies, many of which invested in his scheme. A Ponzi scheme is basically a scam that borrows more money from investors to pay off earlier investors. It's a scheme that, in reality, doesn't last very long because there's only so many investors a fraudster can fool before it all begins to fall apart. But insiders are surprised at how Madoff's scheme lasted for several years.

Part of the reason could be that he owned his own securities company, Bernard L. Madoff Securities Firm, and that allowed him to bypass most of the normal routes that hedge funds use to manage their money. Hedge funds, for instance, stash their portfolios at banks; Madoff managed his accounts within his own firm, ensuring there was no transparency over what he was doing with the money. Because he has a reputation as a Wall St. genius, he attracted investments from the wealthy who poured money into his scheme. 

Not all were taken in with the giddy returns that the scheme steadily provided over the years. Some investment advisors steered their clients away from investments with Madoff, and have been proved right. Apparently, the lack of transparency, and the fact that Madoff's firm's accounts were handled by a nondescript accounting firm alerted them to potential dangers. You could argue that if some investment advisors were so suspicious of Madoff's activities, why didn’t the others become doubtful? Was it ignorance, carelessness or greed that caused them to gamble with their clients' money in a giant pyramid scheme?

Madoff's investment fraud has victims across all spectrums of the social and economic scene. There were wealthy individuals who invested privately, large investment companies who bought into a slice of the pie, and retirees who parked funds for their golden years. At least one charity has announced that it will have to close down after all its savings were wiped out with the collapse of Madoff's scheme.

Some investors have already kick started the process of securities litigation to recover their funds. Madoff, for his part, has admitted that what he operated was a Ponzi scheme, and that he fully expected to go to prison.

Securities Fraud and Implications for Investors

In a year that's seen millions of investors, directly or indirectly, duped by Wall Street shenanigans, including the mortgage backed securities fraud, hedge fund scams, stock fraud, and other kinds of investment fraud, investors have been the unfortunate victims. Many face a bleak future with wiped out savings, and are confronted with the prospect of battling well-connected, big name companies that have gambled away their money.

Investment Fraud Lawsuits

When investors have been duped of their money by unethical practices, including failure to be upfront about the methods used for investment, and the failure to make suitable recommendations to clients about safe places to invest their money, investment advisors, hedge fund companies, and stock brokers can be named in securities and investment fraud lawsuits. Money may be recovered from the insurers of accounting firms, as well as SIPC insurance. For all this, you need the expertise of an experienced securities fraud attorney.

If you've lost money in the Madoff investment scam or other investment fraud, contact a securities fraud attorney at the business litigation law firm of Arnold & Itkin LLP for a free evaluation of your claim. We can help you understand your options for claiming compensation for your loss.

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