X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
With his client, Bernard L. Madoff, facing a 150-year statutory maximum sentence, defense attorney Ira Lee Sorkin asked a federal judge yesterday to set aside the “emotion and hysteria” surrounding the largest Ponzi scheme in history markets and to sentence Mr. Madoff to only 12 years in prison. In a letter to Southern District Judge Denny Chin, Mr. Sorkin argued as a fallback that a 15-to-20 year term would accomplish the goals of the sentencing laws “without disproportionately punishing” Mr. Madoff. “We seek neither mercy nor sympathy,” Mr. Sorkin said, promising that Mr. Madoff, whose name has become synonymous with greed, “will speak to the shame he has felt and to the pain he has caused” when he appears for sentencing on Monday. Read Mr. Sorkin’s Letter to Judge Chin . Mr. Sorkin took note of the “significant anger and resentment” in hundreds of victim letters accumulated by prosecutors, but in a bid for perspective, he also reported on threats to him and his client. “Thankfully, none of the fury expressed in the victim statements has been as shocking as the death threats and anti-Semitic emails that have been directed toward Mr. Madoff and his counsel,” Mr. Sorkin said. “Nevertheless, we believe that the unified tone of the victim statements suggests a desire for a type of mob vengeance that, if countenanced here, would negate and render meaningless the role of the Court.” Read the Victims’ Statements Presented to Judge Chin . Mr. Sorkin, of Dickstein Shapiro, has been in a unique position since Dec. 11, 2008, when Mr. Madoff surrendered to the FBI after acknowledging he had no excuse for a fraud that ran in excess of $13 billion. Mr. Sorkin spent the first two months litigating a bail package to keep his client out of jail. That effort ended on March 12, when Judge Chin sent Mr. Madoff to the Metropolitan Correctional Center after he pleaded guilty to 11 felonies: securities fraud, mail fraud, wire fraud, making false statements to the Securities and Exchange Commission, two counts of international money laundering, money laundering, perjury, false statements, investment advisor fraud and theft from an employee benefit plan ( NYLJ, March 13). Since then, Mr. Sorkin’s efforts have been directed at salvaging what he can for a client whose guilt was established from the outset, even if that means winning only an outside chance that Mr. Madoff could walk out of prison for a brief period at the end of his life. Assistant U.S. Attorneys Marc O. Litt and Lisa A. Baroni are expected to ask for a sentence that negates that possibility when they file their own papers on Friday. In his letter to Judge Chin, Mr. Sorkin said there were several factors that weighed in Mr. Madoff’s favor. He asked Judge Chin to “consider that Mr. Madoff, rather than continuing the fraud up to the point of Government detection—or worse, fleeing the country—effectively turned himself in by confessing his scheme to his sons on Dec. 10, 2008, knowing full well that his sons would do the right thing and advise the authorities.” “Mr. Madoff willingly submitted to F.B.I. custody early the following morning, confessed, and thereafter cooperated fully with the bail conditions imposed through the date of his guilty plea,” Mr. Sorkin wrote. “At his plea allocution, Mr. Madoff accepted full responsibility for his actions and expressed regret and remorse for those victimized by his scheme.” He said that his client cooperated fully with asset recovery for victims and investigations by the Southern District U.S. Attorney’s Office, the Securities and Exchange Commission and the trustee for the Securities Investor Protection Corp. Mr. Madoff also cooperated with the transfer or liquidation of assets and voluntarily entered into agreements that allowed the government to seize property to preserve it for the compensation of victims, he added. Mr. Sorkin said his client also met recently with the inspector general of the SEC “to provide information and insight into Mr. Madoff’s conduct and the role of the SEC in connection with its examination of Mr. Madoff’s business.” “The information exchanged during the meeting will no doubt shape and fortify the future of Wall Street regulation and oversight,” Mr. Sorkin said. Citing Age, Cooperation Mr. Sorkin then dipped into the actuarial tables, noting that Mr. Madoff, 71, has an approximate life expectancy of 13 years, and therefore a sentence of 12 years would be “just short of an effective life sentence.” Mr. Sorkin then argued that a sentence of 15 to 20 years would meet the goals outlined in §3553(a) of the U.S. Sentencing Guidelines. The guidelines were mandatory until the U.S. Supreme Court handed down United States v. Booker, but the chief goal has been and remains to minimize disparities between similarly-situated offenders throughout the country. With that in mind, Mr. Sorkin submitted an affidavit from Herbert Hoelter, co-founder of the National Center on Institutions and Alternatives, which was hired by the defense. Mr. Hoelter performed a comprehensive analysis of more than 42,000 fraud-related sentences between 1999 and 2008. He found 14 cases, comparable to Mr. Madoff’s situation, where the defendant was assigned a guideline range of a life sentence, did not receive a downward departure for cooperating with the government and pleaded guilty instead of going to trial. The average sentence for the 14 defendants, Mr. Hoelter reported, was about 15.3 years. “Because the majority of these cases involved loss figures in excess of $400,000,000 — as does Mr. Madoff’s case — we respectfully urge this Court to impose a sentence on Mr. Madoff that reflects a just degree of proportionality,” Mr. Sorkin said in his letter. Of course, no judge has yet to sentence a defendant quite like Mr. Madoff, who, out of the office of Bernard L. Madoff Investment Securities, represented to clients at the high point of his fraud that he had more than $60 billion invested but, in fact, had not made a trade for at least 13 years. Comparable Cases There are, however, defendants whose cases provide some context for the Madoff sentencing. Ex-WorldCom Inc. Chief Executive Bernard J. Ebbers was ordered by Judge Barbara S. Jones to serve a 25-year sentence in 2005 for the $11 billion fraud that decimated the company. Samuel Israel, co-founder of the Connecticut hedge fund Bayou Group LLC and Bayou chief finance officer Daniel Marino were each ordered to serve 20 years in prison by Judge Colleen McMahon in 2008 for a $400 million fraud. That sentence was upheld by summary order last week. Former Enron Chief Executive Officer Jeffrey Skilling was given a 24-year-and-four-month sentence by Judge Simeon T. Lake III in U.S. District Court in Houston in 2006. In Mr. Sorkin’s letter to Judge Chin, he cites the case that gave judges in the Second Circuit a virtual green light on their discretion to impose a sentence lower than the guidelines range, United States v. Adelson, 06-2738-cr. Richard Adelson, former president of the cancer diagnosis company Impath Inc., was given three and one half years by Southern District Judge Jed S. Rakoff after prosecutors suggested an 85-year term ( NYLJ, July 27, 2006). Judge Rakoff said that following the guidelines in that case would result in a “travesty of justice.” In Adelson , Judge Rakoff found that, because the defendant was acquitted on all counts related to the conspiracy, for sentencing purposes he only joined the conspiracy at the end. He attacked the use of loss calculations in the guidelines that led to offense calculations “that are, quite literally, off the chart.” The language and logic of the Adelson decision will no doubt be cited by defense attorney Gerald L. Shargel when he appears before Judge Rakoff on July 13 for the sentencing of attorney Marc Dreier for a fraud that ran into the hundreds of millions of dollars. For Mr. Sorkin’s purposes, Adelson supports the proposition that, despite the fact that Mr. Madoff broke all kinds of records with his frauds, non-violent white-collar offenders do not deserve life in prison. Judge Chin’s Record While there is little precedent for Mr. Madoff’s crimes, some guidance may be found from the sentences handed down by Judge Chin in the past. Judge Chin, a Clinton appointee who took the bench in August 1994, has shown little hesitation in handing down tough sentences, but he is also comfortable taking into account a defendant’s age and personal circumstances. In 2007, Judge Chin sentenced 66-year-old Richard W. Peterson to 10 years in prison for selling more than $6 million in phony insurance polices he told his victims were underwritten by Lloyd’s of London. The 10 years was the top of the guidelines range. In 2007, Judge Chin gave Texas oilman Oscar S. Wyatt, 83, a one year and one day prison sentence for paying kickbacks to Saddam Hussein to win oil contracts and circumvent oil-for-food restrictions. Mr. Wyatt, who was in ill health, could have received twice the prison term. In 2008, Judge Chin reduced the sentence of South Korean businessman Tongsun Park from five years to three years and one month in prison for accepting money to work undercover for Iraq on the oil-for-food program. Judge Chin did so after the government cited Mr. Park’s cooperation, and the defense cited his declining health. In a case of first impression in the Second Circuit, Judge Chin said in the Tongsun Park case , a court may consider other factors, including a defendant’s health, in determining a sentence reduction ( NYLJ, Feb. 21, 2008). In February 2009, Judge Chin rejected a defense request that Mark Brener, head of the escort service that was central to the downfall of former Governor Eliot Spitzer, be given 11 months time served on prostitution and money laundering charges. Both sides agreed a sentence of between two years and two and one-half years was reasonable. Judge Chin, saying prostitution is not a victimless crime, gave Mr. Brener two and one-half years. In May 2009 Judge Chin had no problem sentencing Afghan tribal leader Bashir Noorzai to life in prison for a massive heroin smuggling conspiracy. In 2002, Judge Chin granted a request for an upward departure and gave four years to Steven Chin Leung for passport fraud. Mr. Chin Leung had faked his own death in the Sept. 11 attacks on the World Trade Center and the judge called his behavior “despicable.” The Second Circuit reversed in part, finding that an obstruction of justice count should have been grouped with a passport count, but the case is more notable for some of Judge Chin’s comments at sentencing. “I don’t believe that emotion is unduly affecting my judgment here,” he said. “There is no doubt that emotion comes into play to some extent. Emotion comes into play in every sentencing decision.” Later, the judge added “Obviously, however, you can’t let emotion cloud your judgment, and I don’t believe I have done that here.” @

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at customercare@alm.com

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.