Ira Lee Sorkin, Dickstein Shapiro partner
Image: Rick Kopstein
If Ira L. Sorkin had a glimmer of hope at persuading a federal appeals court to reinstate bail for his client Bernard L. Madoff, he was not showing it as he left the ceremonial Manhattan courtroom at 500 Pearl Street Thursday morning.
"We did what we had to do," Sorkin said.
Sorkin's job was to show the 2nd U.S. Circuit Court of Appeals by clear and convincing evidence that Southern District of New York Judge Denny Chin erred when he revoked bail on March 12 after Madoff pleaded guilty to 11 felonies. Sorkin argued that his client should be kept out of jail until his June 16 sentencing.
Judges Dennis Jacobs, Robert Sack and Richard Wesley heard arguments from Sorkin and Assistant U.S. Attorney Marc Litt. The judges then retired for a little less than 15 minutes before returning to announce that they were reserving decision.
While the burden was on Sorkin, the judges also had several questions for Litt, many of which revolved around whether circumstances had really changed since Dec. 11, when the government consented to a bail package for a man who had admittedly committed the largest Ponzi scheme in history.
Additional restrictions were added on three occasions in December and January, but the net result remained the same -- Madoff remained out of jail and confined to his Midtown Manhattan penthouse. Madoff was confined to his apartment and watched by cameras and security guards approved by the government.
Judge Jacobs wanted to know whether it was relevant that, in early December, when Madoff knew that the game was over, he could have fled the country with $100 million "and settled in a tropical republic" and "yet, he didn't do that."
"Why isn't that really a powerful argument against your position?" Judge Jacobs asked.
Litt responded that it may be an argument, just not a powerful one, because Madoff had since taken the extra step of pleading guilty.
Judge Wesley pressed the issue, asking "Does the plea change the calculus at all?"
But Judge Wesley also said he thought it was "pertinent" that Madoff violated Southern District Judge Louis Stanton's asset freeze order in the Securities and Exchange Commission's related civil case in late December when Madoff and his wife, Ruth, mailed more than $1 million in jewelry and other valuables to family members and friends.
After Madoff, 70, pleaded guilty, Judge Chin had simply cited his age and the fact that he faced as much 150 years in prison before deeming Madoff a risk of flight and remanding him. Madoff is being held in the Metropolitan Correctional Center in lower Manhattan.
Judge Sack seemed concerned that Judge Chin did not make a more extensive set of findings in revoking bail. Judge Chin heard from Sorkin on bail, but said there was no need to hear from the government.
"Judge Chin didn't even allow you to present your side of the case," he told Litt.
Speaking to Sorkin, Judge Jacobs did not put much stock in the fact that Madoff did not attempt to flee while out on bail and confined to his apartment. The judge said Madoff's return to court appeared to be the result of the "rather extraordinary conditions that had been imposed" including a "platoon" of minders to watch over the Madoff apartment.
Sorkin countered that those conditions were not in effect on Dec. 11, when his client was first taken into custody and then allowed to walk out of the courthouse.
Judge Jacobs wanted to know whether all the current restrictions would have to be in place "if there wasn't a risk of flight."
And Judge Wesley said that Madoff "is a man who has all the mechanisms of flight at his fingertips," someone who structured his life recognizing that "there was some reason not to have anything of his own, in his own name."
"Doesn't this speak of someone who has difficulty following the law?" he asked.
For more coverage of the Bernard Madoff case, see the Law.com Madoff Watch page.
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