10 Years After His Ponzi Scheme, Bernie Madoff Still Doesn’t Deserve to Go Free
Bernie Madoff, who orchestrated the largest Ponzi scheme in history, is reportedly asking President Trump for a commutation, according to a CNBC article from July 24. This demonstrates that Madoff has not taken responsibility for his actions. Financial fraudsters like him must be held accountable for their crimes. As securities attorneys who arbitrate cases against stockbrokers who have defrauded investors, we have dedicated our lives to protecting investors, so it is so unfortunate to hear that Bernie Madoff seems to feel no remorse for the financial devastation he caused.
Have we forgotten that Madoff made off with $20 billion? In 2008, his brokerage firm, Bernard L. Madoff Investment Securities LLC, was revealed to be a massive Ponzi scheme, in which he paid returns to investors using funds obtained from newer investors. He took advantage of people’s trust, all the while never investing any money in actual securities products. His 150-year sentence—the maximum penalty for the charges—was imposed after he pled guilty in 2009 to 11 counts of financial fraud, including money laundering, perjury, and theft.
Madoff’s Ponzi scheme dwarfs the scheme perpetrated by its namesake, Charles Ponzi. In the 1920s, Charles Ponzi scammed 20,000 people over eight months. Contrast that with Madoff’s scheme, which lasted twenty years.
While Irving Picard, Trustee of The Madoff Recovery Initiative, has secured $13.403 billion in recoveries and settlement agreements in conjunction with the Securities Investor Protection Corporation (SIPC), each victim can only receive $500,000 maximum, and some have not received anything. Thousands of people remain devastated by Madoff’s fraud. Madoff not only defrauded individuals, but he also devastated charities, including the foundation run by Holocaust survivor and Nobel recipient Elie Wiesel. Another organization, the JEHT Foundation, was forced to shut down in the wake of the scheme because their major benefactors had invested with Madoff. Ironically, the JEHT Foundation was dedicated to the “transformation of criminal justice policies.” It would be a slap in the face to their mission if Madoff were released from federal prison. When Judge Denny Chin accepted Madoff’s guilty plea and revoked Madoff’s bail, victim Norma Hill told the New York Times, “It was a very courageous stand that the judge took. It has restored my faith in the justice system.” Let’s not have that faith be shaken by giving Madoff a “get out of jail free” card. His former position in the highest echelons of society should not excuse him from having to face the consequences of his decisions, decisions that he made with no regard for anyone else’s welfare but his own.
According to the New York Times and CNBC, President Trump has called Madoff a “sleazebag,” “a scoundrel,” and “a total crook.” When he met Madoff at Mar-a-Lago, he rejected Madoff’s investment proposal, saying, “I can lose my own money.” Thus, it’s safe to say that a presidential commutation probably isn’t in the cards for Madoff.
White-collar criminals may be nonviolent, but they still wreak havoc on the families and institutions of our society. While no blood is spilled, they exert a different kind of violence—financial violence wrought from unbridled greed and unchecked power. These crimes all too often go unpunished. Consider that only one broker—who lied about the value of Credit Suisse’s securities—went to jail after the 2008 financial crisis.
While the United States Sentencing Commission found a lower recidivism rate for white-collar criminals as opposed to those who commit other types of offenses, that means little to the hard-working people robbed of their life savings by a trusted financial advisor who turned out to be a con man. Given his advanced age, if he were released, Madoff would be unlikely to offend again. Indeed, it is almost inconceivable to imagine how he could steal from any more people, as he has already taken away so much from so many. But his prison sentence acts as a deterrent to others who may seek to commit similar crimes. It also gives Madoff plenty of time to reflect on the far-reaching consequences of his selfish actions. A commutation for Madoff would only perpetuate a cycle by which many of the wealthy and privileged in society continue to get a “free pass” from the legal system. “Our system of justice has no sentencing discount for wealth,” wrote the United States Court of Appeals for the 10th Circuit in United States v. Sample.
All Americans are granted equal protection under the law, which should treat all Americans equally. Given the racial and economic disparities in sentencing, the unfortunate reality is that it does not. But no one should be above the law. Madoff’s fate should continue to reflect that.