George S. May Business Blog

Bernard Madoff admits guilt, is this the end or only the beginning of the lies?

Bernard Madoff pleaded guilty today to what has been dubbed the largest ponzi scheme of all time. Below are the details:

Twenty four victims who had lost their entire life savings sat and watched as Bernard Madoff was brought into a New York courtroom. For many this was the first time ever seeing Madoff’s face. With all eyes glued upon him, Madoff stepped up to the stand to offer his a few words. Bernard Madoff’s speech was laced with expressions of how sorry he was. How, after awhile, he knew this day would come, but he never intended it to go this far in the first place. He called his scheme a “short lived solution” to market difficulties in the early nineties, but eventually it became something he was unable to get away from. It was obvious that he had no intention of pointing any implications of guilt toward anybody else, as, in his speech, Bernard Madoff tried to carve out the investment side of his business and separate it from the trading portion of his company. At one point the courtroom erupted in laughter as his lawyer, Ira Sorkin, brought up the topic of bail in between today and his sentencing. Sorkin mentioned the fact that Bernard Madoff’s wife had put up assets of her own throughout the process, but received no sympathy from on-lookers. After Sorkin’s words, the judge responded apathetically as he remanded Madoff into custody. An applause broke out in the courtroom immediately only to be quieted by the judge’s orders.

So now Bernard Madoff will remain behind bars until his sentencing and, likely, for the rest of his life.

As I watched the story unfold this morning, what struck me as odd was: why would Bernard Madoff hire a high-profile lawyer like Ira Sorkin, just to jump ship? Did Madoff intend to plead guilty from the start? Did Madoff become tired of the whole fiasco and held up the white flag, or could this possibly be the beginning of a master plan that Madoff and Sorkin have devised?

All I could keep think was: nobody hires an attorney by the likes of Ira Sorkin to take a plea.

We remember three months ago that Bernard Madoff’s guilt came into the public eye because, allegedly, he admitted to his sons of his ponzi scheme and his sons went to the police with that information.

But I pose the question: do we really believe that this multi-billion dollar lie was going on for the last decade-plus and Bernard Madoff’s two sons, along with the rest of his partners (his brother included) had absolutely no idea?

Hmmm, it does seem a bit fishy right?

Could one man successfully pull the wool over not just his investors but his associates? Is it possible to have an entire billion dollar corporation working under false pre-tenses for years and nobody within the company had a clue that it was illegitimate? Or, could it be that as the heat from whistle-blowers like Harry Markopolis became increasingly unsustainable, Madoff rang the bell on himself as a away to save his family members? Is it possible that the meeting Bernard Madoff had with his sons in his NY flat was just a part of a plan to save everyone else from the repercussions that were to come from the public’s knowledge of their massive ponzi scheme?

That seems a bit more likely, does it not?

This admittance of guilt, is no genuine act of contrition. No, this actually marks the beginning of the strategy for Bernard Madoff’s family’s life from here on out. The reason he has hired Ira Sorkin, is so that Sorkin will be able to work a deal that will keep Madoff’s family free and with some wealth and, in exchange, Madoff takes the fall and reveals where the money is.

Why would Madoff get up in court today, in what is supposed to be an apology to those whom he took advantage of, and spend so much time stressing that everything was his own fault? Since Bernard Madoff was the kingpin in all of this, if he continues to take the blame, the prosecution may not be able to make a case against his sons and brother.

On another note, I have an overwhelming preminition that Madoff may be working with the prosecution to provide information against some of his former major clients. See, prosecution simply wants to know where the money is. If Bernard Madoff comes forward with information of, say, ten major clients, in respect to where their money is being stashed or illegitimate moves they have taken part in, then he may get some leniency when it comes time for sentencing in June.

To repeat above, two pieces of the puzzle just don’t fit:

One: It seems impossible for one man to run an illegal multi-billion dollar corporation and keep all of his employees in the dark

Two: Nobody hires Ira Sorkin to take the first deal thrown at them

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