SEC Says New York Firm Ran $1.7 Billion 'Ponzi-like' Scheme, Violated Whistleblower Laws

The Securities and Exchange Commission filed an enforcement action against a New York asset-management firm and its related entities and principals, alleging that the group ran a “Ponzi-like” scheme that raised over $1.7 billion from nearly 20,000 investors and also retaliated against a whistleblower. The Commission’s lawsuit, filed in a New York federal court, named GPB Capital Holdings, LLC (“GPB”), Ascendant Capital, LLC (“Ascendant Capital”), Ascendant Alternative Strategies, LLC (“AAS”), David Gentile, Jeffry Schneider, and Jeffrey Lash as Defendants. The Commission is seeking disgorgement of ill-gotten gains, civil monetary penalties, and pre-judgment interest. The allegations, if proven, would make GPB one of the largest Ponzi schemes in history and the largest in the last several years; by comparison, the total amount of investor funds involved in Ponzi schemes during the entire year of 2020 would be roughly half of the funds allegedly invested in GPB.

Allegations

According to the Complaint, GPB held itself out as an asset-management firm overseeing limited partnerships that invested in the automotive retail, waste management, and healthcare sectors. Those limited partnerships marketed the investments through Ascendant and AAS which in turn enlisted the services of a series of broker-dealers across the country to reach potential investors. To entice those investors, GPB touted a promised annual return of 8% paid through monthly dividends as well as “special distribution” payments ranging from .5% to 3% on top fo the promised 8% return. In the various marketing documents provided to investors, GPB represented that those payments would be funded from the operations fo the companies in the limited partnership’s portfolio.

But the Commission alleges that GPB began experiencing difficulties in meeting the distribution obligations as early as August 2015. Instead of suspending or reducing the distributions, GPB allegedly paid over $260 million in annual and specialized distributions for the next three years until distributions ceased in late 2018. The Complaint alleges that the majority of those disributions from August 2015 to October 2018 were funded not with cash flow from the limited partnerships’ portfolio companies, but rather with other investor funds.

In order to create the appearance that the distributions from August 2015 forward were coming from operations, the Commission also alleges that GPB and Gentile, with assistance from Lash, manipulated certain financial statements (that were provided to broker-dealers and prospective investors) to paint a rosier picture.

The Complaint also accuses the Defendants of violating the whistleblower provisions of the Securities Exchange Act of 1934, both by failing to include necessary carve-outs in employee departure agreements as well as retaliating against another employee. Specifically, GPB is accused of including language in termination documents for two former employees that restricted one employee’s disclosure of confidential infirmation without GPB’s approval while requiring another employee to contact GPB upon any outreach from any regulatory agency. Another employee who played a key role in automotive operations was fired shortly after he raised concerns to GPB management and later copied GPB on communications with the Commission about those concerns.

Lengthy Investigation

The filing of the enforcement action confirms widely-held beliefs that GPB had been the subject of a lengthy non-public investigation. In early 2019, GPB confirmed that the FBI and a New York agency had searched its offices while also acknowledging that it had received inquiries from the Commission. Later that year, a former SEC examiner who took a job as GPB’s chief compliance officer was indicted on charges that he illegally accessed information on the SEC’s investigation into GPB shortly before leaving the SEC. MIchael Cohn, the former CCO, later pleaded guilty to a misdemeanor in September 2020 and is scheduled to be sentenced on March 24th.

The Complaint also indicates that the Commission had entered into tolling agreements with all of the Defendants as early as February 2019. Tolling agreements are typically used by the Commission to toll the expiration of statutes of limitation during the pendency of an investigation and/or discussions about a potential resolution.

First FINRA Award Issued Involving GPB

As alleged in the Complaint, GPB used a series of broker-dealers across the country to reach potential investors. After GPB ceased distributions in late 2018, those broker-dealers have faced an onslaught of customer arbitrations filed in the Financial Industry Regulatory Authority’s (“FINRA”) arbitral forum. As those cases have worked their way through the arbitration forum largely outside of the public view, last week saw the first case reach a final award stage (after a Zoom trial) where a FINRA panel held Arete Wealth Management, LLC liable for the full amount of the claimant’s loss and attorney’s fees.

A copy of the Commission’s complaint is below.

Trump Reportedly Commutes Sentence Of Convicted Mastermind Of $300 Million Ponzi Scheme

A Florida man convicted of masterminding a $300 million real estate Ponzi scheme has reportedly been released from prison after his 40-year sentence was commuted by President Trump - despite serving just five years of that term. Fred Davis Clark, aka Dave Clark, was originally arrested in Central America in mid-2014 and later convicted and sentenced for masterminding the Cay Clubs Ponzi scheme that raised over $300 million from over 1,000 investors nationwide through the purported sale of interests in luxury resorts to be developed. Although the Bureau of Prison’s website confirms that Clark was released earlier this week, details remain scarce and the White House has not released any statement. If true, this would be the first time in recent memory that a convicted Ponzi schemer has been the beneficiary of the President’s commutation or pardon power.

The Cay Clubs Scheme

Cay Clubs operated from 2004 to 2008, marketing the offering and sale of interests in luxury resorts to be developed nationwide.  Fred Clark served as Cay Clubs' chief executive officer, while Cristal Clark was a managing member and served as the company's registered agent.  Through the purported purchase of dilapidated luxury resorts and the subsequent conversion into luxury resorts, Cay Clubs promised investors a steady income stream that included an upfront "leaseback" payment of 15% To 20%.  In total, the company was able to raise over $300 million from approximately 1,400 investors.

However, by 2006 the company was alleged to have lacked sufficient funds to carry through on the promises made to investors.  Instead of using funds to develop and refurbish the resorts, Cay Clubs allegedly used incoming investor funds to pay "leaseback" payments to existing investors in what authorities alleged was a classic example of a Ponzi scheme.  After an investigation that spanned several years, the Securities and Exchange Commission initiated a civil enforcement action in January 2013 against Cay Clubs and five of its executives, alleging that the company was nothing more than a giant Ponzi scheme.  However, the litigation came to an abrupt end in May 2014 when a Miami federal judge agreed with the accused defendants that the Commission had waited too long to bring charges and dismissed the case on statute of limitations grounds.  

Several Trials

Just weeks after the dismissal of the Commission's action, authorities unveiled criminal charges against Fred and Cristal Clark and coordinated their arrest and extradition from Honduras and Panama where they had previously been living.  The charges stemmed from the Clarks' operation of an unrelated scheme to siphon money from their operation of a series of pawn shops throughout the Caribbean. Authorities alleged that the pair used a series of bank accounts and shell companies previously used with Cay Clubs to steal funds from the pawn shops to sustain their lavish lifestyles abroad.  Several months later, authorities filed bank fraud charges related to the Clarks' interaction with lenders as part of their operation of Cay Clubs - a strategy seemingly designed to ensure the charges would withstand any statute of limitation challenges given that bank fraud carries a 10-year statute of limitations.  

A forensic analysis conducted by the government alleged that Cay Clubs evolved into a Ponzi scheme as early as April 2005, with $2 out of every $3 paid to investors allegedly coming from existing investors.  The forensic analysis also showed that the Clarks lived lavishly, including nearly $20 million in boat purchases and expenses, $5 million in aircraft expenses, and $3 million in personal credit card bills.  Fred Clark also allegedly spent over $3 million at a Bradenton golf and country club.

After a five-week trial earlier this summer, a federal jury deliberated for four days before acquitting Cristal Clark of all charges and deadlocking on the charges against Dave Clark. Shortly after the mistrial, authorities handed down a superseding indictment that signaled a slight change in strategy.  While the previous indictment focused on the Clarks' alleged operation of a Ponzi scheme through Cay Clubs, the superseding indictment honed in on the insider transactions that were used to artificially inflate the unit prices and allegedly defraud the lending institutions.  

The new indictment alleged that Clark would identify certain family members to act as "straw borrowers for loans that were used to purchase Cay Clubs units." These straw borrowers would prepare fraudulent loan applications, which included representations about the borrower's employment and income, designed to induce lenders to approve the extension of credit.  Clark and others also allegedly prepared fraudulent HUD-1 Statements in which they certified that the borrowers had made the required down payment and cash-to-close payments when, in reality, those payments were made by a Cay Clubs entity controlled by Dave Clark.  

The retrial began November 9th and lasted four weeks, resulting in a federal jury convicting Clark on multiple charges including three counts of bank fraud, three counts of making false statements to a financial institution, and obstruction of an official investigation.  Clark was sentenced to serve 40 years in prison as well as to forfeit over $300 million. Clark made several attempts to overturn his conviction or secure a new trial, all of which were overturned. As the U.S. indicated in its opposition to one of Clark’s motions:

Defendant was extremely manipulative, non-responsive, and obstructive during his trial testimony. During his direct examination he refused to answer the questions of his own lawyer and instead continuously provided long, narrative and rambling statements...The court had to direct him on multiple occasions to answer the questions asked.

Law360 reports that Clark had an appeal pending with the U.S. Court of Appeals for the Eleventh Circuit. It remains unclear how the commutation will affect the forfeiture.

Several other individuals pleaded guilty for their role in the scheme and received varying prison sentences. One, Cay Clubs Chief Financial Officer David Schwarz, also received a 40-year prison term but recently had his sentence vacated by the Eleventh Circuit based on the trial court’s denial of Schwarz’s multiple requests for continuances. The Bureau of Prison’s website shows that Schwarz was released from prison shortly after that decision, and it remains unclear whether the government will retry him.

Ponzi Schemes Dropped In 2020, But That May Not Be A Silver Lining

(As a disclaimer, these statistics are presented for educational purposes only, have not been independently verified, and were primarily compiled through articles on Ponzitracker and reporting on the internet by various sources including Kathy Phelps' monthly Ponzi roundups at ThePonziSchemeBlog.com. Individuals accused of Ponzi schemes are presumed innocent until proven guilty. These statistics generally only included Ponzi schemes of around $1 million or more based in the United States. Please direct any comments or inquiries to inquiries@ponzitracker.com.)

Around this time last year, I wrote about how the annual data compilation showed an “ominous 30% surge” in the number of Ponzi schemes uncovered in 2019 as well as the “highest total amount of investor funds at issue in nearly ten years.” Although one year certainly does not create or make a trend, the surge in 2019 stopped a multi-year downward trend and also raised questions about whether the ensuing year (2020) would see the numbers creep back up to levels not seen in nearly a decade.

The answer is technically no, according to newly-compiled data for 2020 which showed a nearly-30% drop in Ponzi schemes during 2020. In a vacuum, this would be welcome news and a seemingly-resounding rejection of any hypothesis about the trend continuing from 2018. But the reality is that the world experienced unprecedented challenges and disruptions as civilization battled the scourge of COVID-19 during most of 2019, and these tribulations touched nearly all facets of life. The data suggests that financial fraud detection also experienced disruption, with the number of Ponzi schemes uncovered during the first half of 2020 marking the lowest six-month figure during the preceding 11-year period compiled by Ponzitracker. And as a result of many parts of the criminal justice system shutting down, the number of prison sentences handed down to Ponzi schemers also was the lowest on record during the last 11 years - by nearly 30%.

As the world slowly continues its climb back to a pre-COVID normalcy, there are multiple hints that 2020’s reversal may be an aberration owing to the pandemic’s paralyzing tentacles. These hints, including increased enforcement and outright warnings from regulators about an increase in consumer complaints, will be worth watching in the coming year.

2020 Ponzi Scheme Discoveries and Sentences

The beginning of 2020 came on the heels of a banner enforcement year in 2019 for regulators who uncovered at least 60 Ponzi schemes that collectively involved more than $3 billion in investor funds. But as murmurs of a unique illness became a deafening (and deadly) roar by late February, governments all over the world shut down and society shuddered to a halt.

In total, 46 schemes were uncovered in 2020, meaning that a new scheme was uncovered about once every eight days. Collectively, the 45 schemes represented roughly $1 billion in investor funds - down more than $2 billion from the $3.245 billion at issue in the schemes uncovered in 2019. Four of the schemes raised over $100 million each from victims, but the majority of schemes involved less than $10 million and resulted in an average scheme size of roughly $22.25 million - down over 60% from the $54 million scheme size seen in 2019. Nearly 1/3 of the accused Ponzi schemers called Florida or California home, but 2020 also saw smaller states like South Dakota, West Virginia, and Kentucky serve as home to an individual accused of a Ponzi scheme. One statistic that has remained remarkably consistent even in 2020? Men continued to make up nearly 90% of the accused Ponzi schemers.

The number of sentences handed down to convicted Ponzi schemers also saw a steep drop as courts grappled with closures and restrictions. Indeed, it appears that sentencing came to a halt during the middle of the year as the country employed strict measures to combat the pandemic. The data shows that there was a single sentence handed down during the period from March 1st to July 10th - the 25-year sentence imposed on radio host William “Doc” Gallagher (who called himself the Money Doctor) for his $20 million Ponzi scheme. The sentencings appear to have recently returned to the pre-COVID pace, but the total of 22 sentencings during 2020 mark a decade low..

Growing Hints Of Trouble Ahead

As the second surge of US infections began to decline in late summer, authorities brought civil or criminal charges against 20 suspected Ponzi schemers during the final four months of 2020 - representing an annualized total identical to the 60 discovered in 2019. While it remains to be seen whether this pace will continue given the ongoing surge in COVID cases, it does suggest that authorities have become more comfortable operating in the current environment and that a return to the near-standstill seen in the spring is unlikely.

One hint that this pace may continue? In mid-December, the Securities and Exchange Commission also issued a rare investor alert warning of “Investment Scam Complaints on the Rise.” These investor alerts and bulletins have historically been issued as routine updates or in connection with current cases or enforcement focuses. However, the December bulletin warned that :

The SEC has recently experienced a significant uptick in tips, complaints, and referrals involving investment scams. The SEC’s Office of Investor Education and Advocacy urges investors to be on high alert in order to protect themselves and others from becoming victims of investment fraud.

Ponzi schemes topped the SEC’s list of frauds to be on the lookout for, and affinity frauds also made the list.

Although there is no guarantee that the “significant uptick” in complaints involving investment scams will translate to an increase in enforcement actions involving Ponzi schemes, the reality is that the economy has enjoyed a remarkable and relatively consistent run over the past ten years since the Great Recession. The number of Ponzi scheme discoveries exploded in the wake of the Great Recession, and it can certainly be hypothesized that the next market downturn may lead to another large increase in discoveries. Regardless, it is still notable that the Commission decided an investor bulletin was warranted to disseminate this news - especially in the wake of the large market drop earlier in 2020 as the pandemic wreaked havoc on financial markets.

The database of alleged Ponzi scheme discoveries is below:

The sentences handed down in 2020 are below:

As The Pandemic Raged, Jailed Ponzi Schemers Sought – And Sometimes Received – Early Release

As the global pandemic spiraled out of control earlier this year, a number of convicted Ponzi schemers used the crisis as an opportunity to seek an early “compassionate release” from prison due to COVID-19 fears.  Although the majority of these efforts were denied, a few were successful and included a Florida man who was released more than seven years early from a 20-year sentence for a nearly-$1 billion Ponzi scheme.  These stories provide a unique and fascinating window into how both society and the courts handled these requests and emphasized the seriousness of the underlying crimes in largely denying the requests.

Compassionate Release And Its Expanded Use During The Pandemic

In the federal prison system, a prisoner has long had the right to seek a “compassionate release,” billed as a humanitarian gesture to allow certain terminally ill or frail inmates to serve the remainder of their sentence outside of prison.  These requests, however, have historically been seldom granted and were usually subject to the subjective determination of those inside the prison system. Indeed, the Marshall Project and New York Times found that roughly 6% of the 5,400 applications were granted during the time period from 2013 to 2017. 

The passage of the bipartisan First Step Act in late 2018 ushered in sweeping reforms to the compassionate release program that included an inmate’s ability to seek judicial review if the Bureau of Prisons (“BOP”) denied their release request.  These reforms saw mixed success; a New York federal judge granted an early release (over BOP’s objection) to former WorldCom CEO Bernard Ebbers while a different judge denied Bernard Madoff’s request. 

As the COVID-19 pandemic exploded in March 2020, U.S. Attorney General William Barr issued a series of memorandums directing BOP to “maximize” the use of home confinement as a way of easing prison populations. Prisons were uniquely susceptible to the virus as a result of their housing conditions; the BOP reported that, as of December 9, 2020, over 6,000 inmates and 1,600 staff tested positive for COVID-19 and the virus had claimed the lives of 153 inmates and 2 staff members.  Barr’s first memorandum, issued on March 26th, directed the BOP to “prioritize the use of your various statutory authorities to grant home confinement for inmates seeking transfer in connection with the ongoing COVID-19 pandemic.” Among other factors, Barr instructed prison officials to consider “the inmate’s crime of conviction, and assessment of the danger posed by the inmate to the community.” 

Following passage of the CARES Act, which included a provision expanding the eligibility of prison inmates beyond those within six months of their release date, Attorney General Barr issued another memorandum in early April directing officials to expand their review of potential inmates to “all at-risk inmates – not only those who were previously eligible for transfer.”  The memorandum emphasized that “time is of the essence” and ordered implementation of these directives “as quickly as possible.”

According to the Marshall Project, inmates were actually less successful in obtaining compassionate release as the pandemic raged.  An article dated October 7, 2020, indicated that the requests were denied at a 98% rate according to its data:

Of the 10,940 federal prisoners who applied for compassionate release from March through May, wardens approved 156… Higher-ups in Washington, D.C., reviewed 84 of the warden approvals and overturned all but 11. Time and again, the only way prisoners were able to win compassionate release was to take the bureau to court to fight the wardens' denials.

Convicted Ponzi Schemers Seek Compassionate Release With Varying Success

The Marshall Project’s data shows that nearly 10% of the federal inmate population sought compassionate release beginning in March 2020.  This included a number of inmates serving prison sentences for their role in Ponzi schemes. 

Based on data reviewed by Ponzitracker, at least 12 convicted Ponzi schemers petitioned the BOP for a compassionate release. After nearly all of those requests were denied, the petitioners then sought judicial review. 

Consistent with the overall statistics cited by the Marshall Project, the majority of requests by these 12 individuals were rejected by the reviewing judge.  In a recurring theme throughout those denials, the presiding judge often noted that the inmate’s particular health situation paled in comparison to the seriousness of the underlying crime and the minimal percentage of the original sentence that had been served leading up to the compassionate release request. 

For example, Lamar Adams was sentenced in 2018 to a nearly-20 year prison sentence after he pleaded guilty to masterminding a $100 million Ponzi scheme involving timber tract investments.  In his May petition, Adams cited his age (61) as well as his underlying health conditions (hypertension, high cholesterol, psoriasis, vertigo, and recurring lung infections) as evidence of his high risk for infection that warranted his serving the rest of his sentence in home confinement.  The federal judge that sentenced Adams, U.S. District Judge Carlton Reeves, ruled that Adams’ allegedly increased susceptibility to contracting the virus was outweighed by the seriousness of his crime and the fact that he had served only 17 months of his nearly 240-month sentence.  Judge Reeves also considered the opposition voiced by several of Adams’ victims.  In addition to Adams, the compassionate release requests submitted by Glyn Richards, Rick Koerber, Dennis Bolze, Troy Wragg, and Glen Galemmo were also denied (though some of those decisions remain on appeal). 

Indeed, multiple Ponzi schemers had their petitions denied even after they contracted COVID-19 in prison. In the case of Albert Parrish, a former economics professor who received a 292-month prison sentence for masterminding a $66 million Ponzi scheme, his handwritten motion for compassionate release was filed in April:

After the Government opposed the request, the Court entered an order denying Parish’s motion on April 27, 2020. Four days later, Parish asked the Court to reconsider his request on the basis that he had since contracted the virus in prison. After the Government provided ongoing updates about Parish’s treatment (and indicating that Parrish would be moved to the hospital if his status worsened), the Court entered an Order on May 19, 2020 finding that Parish had failed to demonstrate “extraordinary and compelling reasons” warranting his release.

Another Ponzi schemer was initially successful at securing a compassionate release but later saw that release overturned after an outcry by his victims.  Scott Farah has been serving a 15-year sentence since being imprisoned in 2010 for what authorities called the largest Ponzi scheme in New Hampshire history.  After Farah’s compassionate release request was granted by prison officials in June, a number of victims learned of the impending release and contacted both the U.S. Attorney’s Office and a local newspaper to express their outrage at the decision.  After the U.S. Attorney’s office reportedly intervened with prison officials, Farah’s release was overturned. 

Not all of the requests were denied. A few individuals were successful in securing release, most notably a Florida man who was released to home confinement seven years ahead of his scheduled release for running one of Florida’s largest Ponzi schemes.  Nevin Shapiro pleaded guilty in 2011 to running a $930 million Ponzi scheme involving a fictitious grocery distribution business and received a 20-year prison sentence.  He was scheduled to be released from prison in June 2027.  However, it was reported in June that Shapiro had secured an early release and had been transferred into home confinement.  Shapiro’s case for release was reportedly aided by the fact that he had served more than half of his sentence and that he had several underlying health conditions that placed him at increased risk of catching the virus. 

According to Yahoo Sports, Shapiro was released to the custody of a family member and will be subject to electronic monitoring, a ban on drinking alcohol, and a monitored walking area near the residence.  Any job Shapiro secures will also result in the garnishing of any earnings towards the remainder of his $82 million restitution obligation. 

Others who were able to obtain an early release included Chris Bass (was released five months ahead of scheduled release) and Philip Lochmiller (released more than 20 years ahead of schedule due to ongoing dementia). 

An Unfavorable Outlook

Of the few release requests that were granted to convicted Ponzi schemers, it appears they came near the onset of the pandemic during which authorities were scrambling to manage an unprecedented situation and comply with Attorney General Barr’s urgent directives. Since that time, as both authorities and courts have become better educated about the virus and adapted to the new normal, the trend appears to be that the increased susceptibility to the virus alone does not satisfy the “extraordinary and compelling” threshold needed to justify an early release. Although these requests will continue to be judged on a case-by-case basis, it seems those few who were successful in obtaining an early release may have benefitted from their diligence in seeking relief.

Bernard Madoff Wants Early "Compassionate Release" Based On Failing Health

Less than 11 years into his 150-year prison sentence after admitting to operating the largest Ponzi scheme in history, Bernard Madoff has asked a New York federal court to exercise a “modicum of compassion” by freeing him to allow him to spend his estimated remaining 18 months with his family members. In a Motion for Compassionate Release filed yesterday, Madoff cited a litany of medical issues plaguing him and contended that “circumstances have changed” in attempting to justify his release under the Bureau of Prison’s compassionate release program. Apparently in connection with the motion’s filing, Madoff was quoted in the Washington Post that “I’ve served 11 years already, and, quite frankly, I’ve suffered through it.”

Until recently, the BOP’s Compassionate Release program was the sole arbitrer of a prisoner’s request for compassionate release. Notably, only the BOP had the ability to ask a court to determine whether release was warranted - a step which studies showed was rarely if ever taken. In a study by the Marshall Project, the Bureau of Prisons approved 6 percent of the 5,400 applications received from 2013 to 2017. And according to a 2012 report by Human Rights Watch and Families Against Mandatory Minimums, the BOP routinely refused to bring prisoners’ compassionate release requests to courts - averaging only two dozen court requests per year from 1992 to 2012.

The First Step Act, passed in late 2018 with broad bipartisan support, included a series of criminal justice reforms that included a sweeping overhaul of the compassionate release program. Although the Act did not change the statutory standards for compassionate release, it gave inmates the ability to bring their own motion for compassionate release once their petition was denied by the BOP. Thus, an option that had been elusive at best and historically unavailable to inmates was now within their arsenal once their request for compassionate relief was denied by the BOP.

Madoff’s Motion spends roughly five pages articulating the history of compassionate release and the recent changes by the First Step Act, ultimately arguing that the Southern District of New York had the authority to reduce his 150-year prison term if: (1) he had fully exhausted his adminstrative rights to appeal the BOP’s denial of his request; (2) “extraordinary and compelling reasons” warranted a reduction in his sentence; (3) consideration of factors set forth in section 3553(a); and (4) “such a reduction is consistent with applicable policy statements issued by the Sentencing Commission.”

With the first factor not in dispute given the BOP’s prior denial, Madoff contended that his dire health constituted “extraordinary and compelling reasons” justifying his release. In addition to pointing to a litany of maladies plaguing him, including end-stage renal disease, hypertension, cardiovascular disease, esophageal reflux, hyperparathyroidism, bladder neck obstruction, and insomnia, Madoff also revealed that the BOP had concluded that his condition was “considered terminal with a life expectancy of less than 18 months.” Madoff argued that his release would be consistent with applicable policy statements issued by the Sentencing Commission, noting his history of non-violence, limited remaining lifespan, and lack of danger to the community. Madoff also references the recent decision by a New York federal judge to grant compassionate release (over the BOP’s objections) to former WorldCom CEO Bernard Ebbers based on his medical condition after Ebbers had served roughly half of his 25-year sentence.

The Motion goes to great lengths to emphasize both Madoff’s diminished medical state and the toll that his current sentence has imposed on him. Madoff reportedly uses a walker to ambulate, experiences weakness and fatigue, and uses supplemental oxygen for shortness of breath. He also claims to have served his “golden years” from age 71-81 behind bars in arguing that his early release would not diminish the seriousness of his offense. According to Madoff, “even with release, Madoff still will serve a functional life sentence.”

The Motion also gives a glimpse of how Madoff envisions a potential life outside prison. Having forfeited all of his assets as part of his plea agreement with the government, Madoff noted his intent to survive off Social Security and Medicare benefits. He also suggested that he will reside with an unnamed friend, rather than his wife.

A copy of the Motion is below: