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Madoff Waits In Jail For June Sentencing

LINDA WERTHEIMER, host:

This is MORNING EDITION from NPR News. I'm Linda Wertheimer.

Bernard Madoff woke up this morning in a Manhattan jail cell, the first day of what is expected to be a life prison sentence. Madoff admitted yesterday he was guilty of defrauding thousands of investors in the Ponzi scheme, but he didn't answer all the questions in the case. NPR's Robert Smith reports.

ROBERT SMITH: If the Madoff scandal were a movie, it would end with yesterday's scene in the federal courthouse. The financier stands to address the packed courtroom. He admits he's a criminal. Then he says he is deeply sorry and ashamed. The handcuffs click, the victims applaud, roll the credits. But as the audience left the courthouse, no one looked like they had just seen a happy ending. Judith Welling says it's hard to cheer when you still don't know where your million dollars went.

Ms. JUDITH WELLING: I mean, I think he should be in jail for the rest of his life, and I certainly approve of whatever is being done, but it's not giving me any particular satisfaction. Satisfaction would be if we all get our money back.

SMITH: The Madoff case wasn't a whodunit murder mystery. It was more like a financial kidnapping. Until someone can locate what remains of the money, investor Eileen Kent says the case is not closed.

Ms. EILEEN KANT: Because there's still a lot more to uncover. The US attorney has a lot more work to do, and he knows it, and I have faith in him.

SMITH: But it won't be easy. Madoff pleaded guilty without any sort of deal with prosecutors. He is under no obligation to lift a finger to help his former clients out. Instead, investigators will have to decipher an office full of fake documents. The investments statements that Madoff sent to his clients total $65 billion. Most of that is thought to be fiction. Another large chunk was certainly paid out by Madoff to early investors who withdrew their money. So far, investigators have only been able to locate about a billion dollars. The investigators who showed up to watch the guilty plea can't believe that's all there is. Jeffrey Servin is a lawyer from Philadelphia who represents three people cheated by Madoff.

Mr. JEFFREY SERVIN (Attorney): Anybody who has the ability to pull this off for as long as he did knew this day was coming at some point, and it just seems logical that they made provision that when this day did come, that there was a backup plan somewhere.

SMITH: Perhaps in offshore accounts or under a very, very large mattress. While the search is on, the competition between investors to get the money back in heating up. Some lawyers are filing early lawsuits to get the first in line for any money that might be found. Brad Friedman represents over a hundred victims. He doesn't want the government trying to take that money first.

Mr. BRAD FRIEDMAN (Attorney): There's assets hidden all over the world. His family members obviously have assets that are the product of this scheme, and all of those assets should be made available for the benefit of the victims.

SMITH: Until then, frustrated and angry investors are looking for who else they can go after. Eileen Kent, who lost 80 percent of her savings to Madoff, says the government needs to take some of the blame.

Ms. KENT: You know, we trusted him because the SEC trusted him, the Securities and Exchange Commission. The SEC turned a blind eye time and time and time again.

SMITH: Others outside the courthouse wanted to know when the government was going to pursue Madoff's wife and his two sons.

Ms. MIRIAM SEIGMAN: I strongly suspect that this was not a solo operation. This is a family business.

SMITH: Miriam Seigman is 65 years old. She says she never had a lot of money, but all that she hoped to live on was invested with Madoff. With the money gone, Seigman was forced to go on food stamps. She came to court to try to figure out what happened to her life, but she was leaving now without closure.

Ms. SEIGMAN: I mean, there's all this vindictiveness, and I don't feel that, oddly enough. I know. I don't share Elie Wiesel's notion that we should lock him in a cell and flash pictures of his victims. What good will that do? The good that can come out of this is the truth, and so far we've had precious little of it.

SMITH: There will be another chance to hear the truth from Madoff's mouth. He'll return to the courthouse on June 16th to receive his sentence. Many of the investors say they'll be back, too, looking for some for of satisfaction.

Robert Smith, NPR News, New York. Transcript provided by NPR, Copyright NPR.

Robert Smith
Robert Smith is a host for NPR's Planet Money where he tells stories about how the global economy is affecting our lives.
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