The man whose older brother, Bernard Madoff, orchestrated the largest Ponzi scheme in history is set to learn his own fate for his role in the scheme that bilked thousands of investors out of billions of dollars. Peter Madoff, the youngest brother of Bernard and Mark Madoff, previously agreed to plead guilty to a single charge of conspiracy to commit securities fraud and a single count of falsifying records of an investment adviser back in June. As part of his plea agreement, he agreed not to seek less than the 10-year term recommended by prosecutors. In a letter to the sentencing judge, Madoff kept his word, instead seeking only to report to prison after attending his granddaughter's bat mitzvah in January. Mr. Madoff has steadfastly maintained that he was unaware of his older brother's massive fraud until it was privately disclosed to him on December 9, 2008. Authorities arrested Bernard Madoff two days later.
Mr. Madoff served in various capacities at Bernard L. Madoff Investment Securities ("BLMIS") since 1965, holding the position of head of compliance when the scheme was revealed in December 2008. While prosecutors have refrained from accusing Mr. Madoff of having direct knowledge of his brother's fraud, they instead argue that he committed other crimes that unwittingly allowed the decades-long Ponzi scheme to continue unnoticed. These crimes included the filing of false forms drastically underreporting the number of customers with accounts at BLMIS and the total funds under management.
Several of Madoff's immediate and extended family members served in various capacities with their father's firm. His son, Mark, was employed at the firm's proprietary trading unit, and continued to deny any involvement in the scheme until his suicide on December 9, 2010, two years to the date of his father's confession. Another son, Andrew, served as co-head of trading along with Mark. While court-appointed bankruptcy trustee Irving Picard has filed suit against the family for $200 million, there have been no other indications of an imminent criminal case against Andrew Madoff or any other family members.
Along with the prison sentence, Mr. Madoff also agreed to a criminal forfeiture order of $143.1 billion representing the total amount of investor funds that passed through the operation. This forfeiture will include all of Mr. Madoff's real and personal property, and will also include claims to any income Mr. Madoff earns after he is released. Indeed, according to Mr. Madoff's lawyer, the forfeiture order will ensure that he will "live out his days as a jobless pariah."
Peter Madoff is due to be sentenced Thursday, December 20.