Madoff’s Lawyers Argue For Release on Bail

Should Bernard Madoff, who admits running the largest financial fraud in Wall Street history, spend the next few months awaiting sentencing in a cramped New York City jail cell or inside his lavish $7 million Manhattan penthouse apartment?

That is the question facing a panel of federal appeals court judges in the case of the confessed swindler, who pleaded guilty to making off with up to $65 billion in investor funds in a massive Ponzi scheme over a period of nearly 20 years.

Attorneys for Madoff, 70, who was jailed last week pending sentencing in June, have asked that he be released from a Manhattan jail on house arrest and allowed to return to his apartment. At a hearing today, three judges peppered Madoff’s attorneys and federal prosecutors with questions then said they would reach a decision “in due course.” It is unclear when the panel of the U.S. Court of Appeals for the 2nd Circuit will decide on Madoff’s bail request.

Is Madoff a Flight Risk?

Prosecutors opposed the request to release Madoff on house arrest, saying the disgraced money manager is a flight risk and has vast financial assets to flee the country to avoid prosecution. Madoff is scheduled to be sentenced on June 16 and faces a maximum of 150 years in prison.

Judge Richard Wesley asked Madoff’s attorney, Ira Lee Sorkin, why Madoff should be released on bail when the money manager “has the mechanisms of flight at his fingertips” and has placed virtually all of his assets in his wife’s name.

But Chief Judge Dennis Jacobs wondered why the government considers Madoff a serious flight risk now, when Madoff remained free on bail for months and seemingly could have left the country at any time before his crimes were discovered if he wanted to avoid arrest.

“He didn’t do that, so why isn’t it a powerful argument against your position?” the judge asked prosecutors.

Prosecutors said that even electronic monitoring used on Madoff during house arrest is not fail-proof and that he could conceivably sneak out of his apartment building and flee the country if released from jail on house arrest.

Madoff Case Grows

The day before Madoff’s attorneys returned to court to ask for his release on bail, the man who served as Madoff’s accountant was arrested and charged with fraud for lying about doing audits of Madoff’s financial firms. David Friehling is accused of deceiving investors and federal investigators by falsely certifying that he had audited Madoff’s books when in fact he had not.

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