Peter Madoff, Bernie Madoff's brother, to plead guilty in NY
NEW YORK (AP) - The brother of Ponzi scheme king Bernard Madoff is scheduled to plead guilty this week to conspiracy in a criminal case resulting from the multibillion-dollar fraud, court papers say.
Peter Madoff is the former chief compliance officer at the private investment arm of Bernard Madoff's business.
Court papers signed by a federal judge in Manhattan on Wednesday show Peter Madoff will plead guilty on Friday to conspiracy to commit securities fraud and other offenses including falsifying records.
Madoff also agreed to the criminal forfeiture of $143 billion, including all of his real and personal property.
Madoff agrees to serve 10 years in prison, the court papers say. His attorney didn't immediately return an email seeking comment Wednesday.
Bernard Madoff is serving a 150-year prison sentence in Butner, N.C., after revealing in December 2008 that he cheated thousands of investors of roughly $20 billion for years, using money from new investors to pay returns to existing clients.
Lawyers for a court-appointed trustee recovering money for Bernard Madoff's investors had said Peter Madoff also was the company's senior managing director.
The trustee, Irving Picard, said in court papers that Peter Madoff, who had worked with his brother since 1965, "failed miserably" to meet his responsibilities to monitor the company's operations and ensure its compliance with federal securities laws.
The court papers said Peter Madoff had received at least $60 million during the fraud and used fake stock trades to make large withdrawals seem justified.
Picard sought nearly $200 million from Madoff family members, claiming they used Bernard L. Madoff Investment Securities LLC as "the family piggy bank" to pay for vacation homes, cars, boats and even a stake in a beauty parlor.
Picard's pending lawsuit alleges that over the years Peter Madoff, his daughter and his nephews "withdrew millions more than they invested" in private investment accounts they had with the firm.
Peter Madoff "ignored obvious red flags that the profits reflected in account statements could not have been earned legitimately, to the detriment of BLMIS and its other customers," the lawsuit says. Bernard Madoff's relatives have said they didn't know about his Ponzi scheme.
The massive scheme, run since at least the early 1990s, demolished the life savings of thousands of people, wrecked charities and shook confidence in the U.S. financial system.
When Bernard Madoff pleaded guilty, he insisted that he acted alone, describing a separate wholesale stock-trading firm run by his sons and brother as honest and legitimate.